The Bank of Canada has announced it would maintain its benchmark interest rate at 1%, leaving the trend-setting rate at the same level it's been at for almost three years. The monetary stimulus policy will remain in place, as long as the country's economic outlook remains uncertain, Xinhua cited the Canadian central bank as saying in a statement on Wednesday.
The anticipated rotation of exports and investment demand in Canada appeared to be delayed by uncertain global economic conditions, said the central bank. "The global economy continues to expand broadly as expected, but its dynamic has moderated," it said.
Recent data suggested "slightly less momentum overall" in the US than anticipated, and the "increased" financial volatility in a number of emerging economies added uncertainty to growth prospects, the bank said.
Noting that Canada's household finances continue to improve, with household credit growth slowing in the presence of higher mortgage rates, the bank said the country's housing sector was slightly stronger than anticipated. Bank of Canada governor Stephen Poloz showed no sign of shifting away from the current monetary policy.
Sluggish growth made it hard for the central bank to withdraw from its stimulus policy. Statistic Canada reported Aug 30 that the country's growth in the second quarter slowed to 1.7%, down from the previous 2.2%.