- Bank of Canada
Bank of Canada Governor Stephen Poloz announced that the BoC would keep its key interest rate on hold and remained neutral on its next move, referring to slack in the Canadian economy that will keep cost of living in check. Policy makers keep the benchmark rate on overnight loans between commercial banks at 1% for the 32 time in a row and do not plan to raise or lower rates anytime soon. Growth in Canada was almost exactly in line with the bank's expectations in the second quarter. Last week, Statistics Canada reported the economy expanded by an annualized 3.1%, the strongest pace since 2011. Exports, which have been a consistent area of concern for Poloz, were the main contributor, surging by 4.2% in the second quarter after declining by 0.2% in the beginning of the year. Canada's inflation rate slowed to 2.1% in July from 2.4% in June, after accelerating from 0.7% in October. The central bank says the global economy is grew at an expectedly mixed pace, with strong business investment driving the U.S. recovery and the geopolitical crisis in Ukraine weighing on Europe.
Economists generally share the same consensus that the central bank will begin to raise it key rate next year in lockstep with the U.S. Federal Reserve. Canada's Dollar strengthened further after the decision, appreciating 0.3% to C$1.0892 per U.S. Dollar at 10:23 a.m. in Toronto.
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