Bank of Canada’s Overnight Money Rate Target Left at 0.50% at Second Planned Meeting of 2016
March 9, 2016
For four and a third years from September 2010 until January 2015, Canada’s central bank interest rate had stayed at 1.0%. The plunge in oil and other commodity prices for this commodity-intensive economy had caused a mini-recession last year to which monetary officials responded with interest rate cuts of 25 basis points each in January and July. A statement following the latest Board meeting observes that macroeconomic trends since the January Monetary Policy Report have developed more or less as anticipated. Growth last quarter was not as weak as hoped, and rebounds in the Canadian dollar and oil prices met their expectations. The statement concludes, “the risks to the profile for inflation are roughly balanced. Meanwhile, financial vulnerabilities continue to edge higher, in part due to regional shifts in activity associated with the structural adjustment underway in Canada’s economy. The Bank’s Governing Council judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate.”
Copyright 2016, Larry Greenberg. All rights reserved. No secondary distribution without explicit permission.
Tags: Bank of Canada