The Bank of Canada's economic outlook and key policy rate remained unchanged when it announced on May 29th2013 it was keeping its trend-setting overnite lending rate One per cent.
In its April announcement, the Bank recognised the persistent commercial weakness and cut its outlook for Canadian economic growth to 1.5 % in 2013. Although recent business stories means that expansion in the 1st quarter came in stronger than expected, the Bank nevertheless expects annual commercial expansion this year to remain in line with its prediction.
"The Bank recognizes that expansion in household debt is moderating," declared Gregory Klump, CREA's Chief Economist.
In a similar fashion, total CPI inflation was a little less tough than projected in the Bank's April MPR, but the Bank still expects inflation to reach its 2 percent target in mid-2015. "It's a constructive development and yet another reason for the Bank of Canada to keep interest rates on hold."
"The bottom line is that inflation remains moribund and the Canadian economy is still in low gear, so there isn't a reason for the Bank to start raising interest rates any time soon," claimed Klump. "Additionally, the Bank of Canada knows that a sudden shift in direction for IR policy would spook finance markets and gives the Bank a different reason to keep interest rates on hold once incoming Bank of Canada Governor Stephen Poloz takes the helm."
As of May 29th, 2013, the advertised five-year lending rate stood at 5.14 %, unchanged from the prior Bank rate announcement on April 17th.
In its April announcement, the Bank recognised the persistent commercial weakness and cut its outlook for Canadian economic growth to 1.5 % in 2013. Although recent business stories means that expansion in the 1st quarter came in stronger than expected, the Bank nevertheless expects annual commercial expansion this year to remain in line with its prediction.
"The Bank recognizes that expansion in household debt is moderating," declared Gregory Klump, CREA's Chief Economist.
In a similar fashion, total CPI inflation was a little less tough than projected in the Bank's April MPR, but the Bank still expects inflation to reach its 2 percent target in mid-2015. "It's a constructive development and yet another reason for the Bank of Canada to keep interest rates on hold."
"The bottom line is that inflation remains moribund and the Canadian economy is still in low gear, so there isn't a reason for the Bank to start raising interest rates any time soon," claimed Klump. "Additionally, the Bank of Canada knows that a sudden shift in direction for IR policy would spook finance markets and gives the Bank a different reason to keep interest rates on hold once incoming Bank of Canada Governor Stephen Poloz takes the helm."
As of May 29th, 2013, the advertised five-year lending rate stood at 5.14 %, unchanged from the prior Bank rate announcement on April 17th.
No comments:
Post a Comment