Canada holds interest rate steady at 3.00%. | CountingPips Forex & Currency Trading Blog

July 15, 2008 - Forex Economic News

Canada holds interest rate steady at 3.00%.

The Bank of Canada announced its decision to keep its interest rate unchanged at 3.00 percent today. The decision to keep the interest rate steady was widely expected by economic and market forecasts. The Bank of Canada has kept the interest rate unchanged for the second month in a row after reducing the rate by 50 basis points in April. The bank has cut its rate by 150 basis points since December of 2007.

The Bank of Canada statement accompanying the rate decision commented on the state of the Canadian economy and the factors that "pose significant upside and downside risks" to economic growth. The bank stated that, "three major developments are affecting the Canadian economy: the protracted weakness in the U.S. economy; ongoing turbulence in global financial markets; and sharp increases in many commodity prices." The statement noted that if energy prices maintain their current position then cpi inflation may increase above 4 percent which will be well above the bank's target rate of 2 percent cpi inflation. The bank is projecting GDP growth of about 1.0 percent over the rest of 2008 and then expects growth to pick up to 2.3 percent in 2009 and to 3.3 percent in 2010. The next rate decision is scheduled for September 3rd.

Tags: interest rate, canada, boc, canadian economy, cad

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