- Stephen Poloz, BoC Governor
That was easy. The Bank of Canada was not facing a difficult choice on Wednesday and the decision to keep its monetary policy unchanged was widely expected by markets. Canada policymakers cited improved growth and overall economic conditions as the main reason behind staying pat; however, they also warned that geopolitical uncertainty including tensions in Ukraine can become a massive drag on further growth. The BoC also made no adjustments to its neutral bias stance, meaning that during the next month's meeting the possibility of a rate hike or a rate cut are almost equal.
Poloz also mentioned higher improved inflation and inflation outlook; however, the indicator is still far away from matching the BoC's projections outlined in January. The most latest data showed that the land of the maple leaf picked up pace in the first month of 2014, providing a relief for the central bank's stagnating inflation and growth concerns. Earlier this year Canada Finance Minister Jim Flaherty pledged the country will post stronger-than-expected growth this year on the back of strong optimism surrounding the U.S. recovery. Flaherty sees a potential for a 2%-3% growth this year, compared with the median forecast expressed by analysts that stands for 2.3% expansion. Canada has posted consistently sluggish figures in the past year, with the growth averaging just 1.9%. This Friday Statistics Canada is projected to show a 2.9% growth for the final quarter.
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