Bank of Canada Leaves Rates As Is

Overnight-Rate The Bank of Canada’s rate announcements have sounded pretty similar for the last 8 months:  no change, no change, no change…

Well, today they met again, and guess what? No change.

The Bank left Canada’s key lending rate at a record low 0.25%.  That’s been the rate since April 21 of last year.

In today’s report it said:

  • “Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010.”
  • “The global economic recovery is under way.”
  • The economy should return “to full capacity” with inflation returning “to the 2% target in the third quarter of 2011.”
  • “The Bank projects that the economy will grow by 2.9% in 2010 and 3.5% in 2011.” (an increase versus its prior forecast)

The next BoC meeting is March 2.

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In Other News…

  • Canada’s leading indicators posted their biggest gain in 27 years in December—up 1.5% month-over-month. Economists had expected a rise of just 1.0%. It tied February 1983 for the largest gain in over 50 years. More from StatsCan…
  • Government bond yields are flat and today’s news should have little effect on mortgage rates in the short-term.
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