The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 percent. The record-low interest rate, now in place for the past several months, is scheduled to stay in this position until June 2010, provided the Bank of Canada’s inflation outlook does not change. As well, the Bank Rate remains unchanged at 1/2 percent.
In its statement, the Bank of Canada wrote: “While the outlook for global growth through 2010 and 2011 is somewhat stronger than the Bank had projected in its October Monetary Policy Report, the recovery continues to depend on exceptional monetary and fiscal stimulus, as well as extraordinary measures taken to support financial systems.”
The Bank projects that the Canadian economy will grow by 2.9 percent in 2010 and 3.5 percent in 2011, after contracting by 2.5 percent in 2009 – “The private sector should become the sole driver of domestic demand growth in 2011.”
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