- Bank of Canada
The Bank of Canada maintained its key interest rate on hold and said effect from an oil-price shock may be waning. The central bank kept the benchmark rate on overnight loans between commercial banks at 0.75% for a second consecutive meeting after an unexpected rate cut in January. The BoC considerably cut its first quarter growth expectations to 0% from 1.5%. Yet, outlook for Q2 and Q3 was revised upwards to 1.8% and 2.8%, respectively. In 2016, the central bank expects the nation's economy to grow at 2.5%. The BoC added that despite the devastating effects of lower crude prices, non-energy exports, investment and labour market conditions are ameliorating and will flourish in the middle of the year, largely due to strong US demand. The headline inflation is estimated to accelerate to 1% and 0.8% in Q1 and Q2, respectively, up from 0.5% and 0.3%.
Meanwhile, Canada's manufacturing sales unexpectedly declined in February amid falling shipments from car and aerospace manufacturers. Sales dropped 1.7% to C$50 billion, Statistics Canada reported, following a revised 3% drop in January. The decline in February was caused by motor vehicles, which plummeted 15%. Excluding autos, however, manufacturing sales slid 0.1%. Sales of aerospace products plunged 26% in February due to the impact of a stabilizing Canadian currency. Sales declined 1.5% from the same period last year.
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