Investing.com - The Bank of Canada kept its benchmark interest rate on hold in July, after already cutting rates twice this year, it announced on Wednesday.
The BoC said it was leaving its overnight cash rate unchanged at 0.50%, in line with expectations.
Inflation has evolved in line with the outlook in the Bank’s July Monetary Policy Report. The dynamics of GDP growth in Canada outlined in July’s MPR also remain intact. The stimulative effects of previous monetary policy actions are working their way through the Canadian economy.
Canada’s resource sector continues to adjust to lower prices for oil and other commodities, with some spillover to the rest of the economy. These adjustments are complex and are expected to take considerable time.
Increasing uncertainty about growth prospects for China and other emerging-market economies, in contrast, is raising questions about the pace of the global recovery.
Movements in the Canadian dollar are helping to absorb some of the impact of lower commodity prices and are facilitating the adjustments taking place in Canada’s economy.
"Taking all of these developments into consideration, the Bank judges that the risks to the outlook for inflation remain within the zone for which the current stance of monetary policy is appropriate," the bank's statement read.
USD/CAD was trading at 1.3167 from around 1.3249 ahead of the announcement.