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Bank of Canada leaves interest rate unchanged at 0.75%

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Investing.com -

Investing.com - The Bank of Canada kept its benchmark interest rate on hold in April and said that risks to the inflation outlook are roughly balance, it announced on Wednesday.

The BoC said it was leaving its overnight cash rate unchanged at 0.75%, in line with expectations.

The bank said in a statement that, "Risks to the outlook for inflation are now roughly balanced and risks to financial stability appear to be evolving as expected."

Total inflation is at 1%, reflecting the drop in consumer energy prices. Core inflation has remained close to 2% in recent months, as the temporary effects of sector-specific factors and pass-through of the lower Canadian dollar have offset the disinflationary forces from slack in the economy.

The Canadian economy is estimated to have stalled in the first quarter of 2015. The Bank's assessment is that the impact of the oil price shock on growth will be more front-loaded than predicted in January, but not larger.

Real GDP growth is projected to rebound in the second quarter and subsequently strengthen to average about 2.25% on a quarterly basis until the middle of 2016.

In conclusion, policymakers judged that "the current degree of monetary policy stimulus is still appropriate."

USD/CAD was trading at 1.2458 from around 1.2526 ahead of the announcement.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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