- Bank of Canada
The Bank of Canada maintained its key overnight lending rate at 0.5%, highlighting that the domestic economy was adjusting largely as expected to the effects of low prices and other headwinds. The central bank stressed that the nation's economy benefitted from the US economic recovery, weaker Canadian Dollar and the bank's easing policy. Yet, the resource sector remains a problem for Canada's economy, as lower oil prices undermines the economy and business investments are facing major spending cuts in the energy related field. The latest GDP data showed the Canadian economy recovered in the third quarter, growing 2.3% annualized, close to the BoC's expectations of a 2.5% expansion rate. Nevertheless, the turnaround may be short-lived, as the quarter ended with a 0.5% contraction in September, suggesting a weak start to the final quarter of the year. According to the central bank's estimates, the nation's economy is likely to grow 1.5%.
In its last quarterly Monetary Policy Report released in October, the BoC predicted economic growth of 1.1% this year, followed by 2% in 2016 and 2.5% in 2017. Meanwhile, the rate of inflation, the bank's main concern in determining policy, has stuck near the bottom of its target range of between 1% and 3%.
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