- Bank of Canada
The Bank of Canada left its key overnight lending rate unchanged at 0.5% after cutting it twice this year, saying that nation's economy rebounded as predicted in July. Household spending continued to support economic activity and is projected to increase at a moderate pace. Non-resource sectors benefitted from the stimulative effects of previous monetary policy actions as well as depreciation of the Canadian Dollar. Meanwhile, lower commodity prices lowered Canada's terms of trade and dampened business investment and exports in the resource sector. This prompted the Bank of Canada to modestly downgrade growth forecasts for 2016 and 2017. The central bank expected the nation's economic output to increase by just over 1.0% in 2015 and 2.0% in 2016, compared with a July forecast of 2.3% growth next year. For 2017, growth is predicted to be 2.5% instead of 2.6%. At the same time, the bank said Canada's inflation evolved in line the BoC's forecasts, remaining near the bottom of the target range. The central bank expected the underlying trend of inflation to continue to be about 1.5% to 1.7%. The BoC predicted the Canadian economy to return to full capacity and inflation sustainably to target around mid-2017. The next scheduled date for announcing the overnight rate target is 2 December 2015.
© Dukascopy Bank SA