Investing.com – The Bank of Canada (BoC) decided to keep its benchmark interest rate on hold in September, even though inflation risks had tilted to the downside, it announced on Wednesday.
The BoC said it was leaving its overnight cash rate unchanged at 0.50%, in line with market expectations, as well as keeping the bank rate a 0.75% and the deposit rate at 0.25%.
The BoC noted that global growth in the first half of 2016 was slower than it had projected but expected it to “strengthen gradually” in the remainder of the year.
“While Canada’s economy shrank in the second quarter, the Bank still projects a substantial rebound in the second half of this year,” the BoC forecast.
The Canadian central bank further noted that inflation was roughly in line with its expectations.
“On balance, risks to the profile for inflation have tilted somewhat to the downside since July,” the BoC admitted.
“The overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate," the Canadian monetary authority concluded.
Following the press release, which was releases simultaneously with the U.S. job openings, the loonie strengthened. USD/CAD was trading at 1.2870 from around 1.2834 ahead of the announcement.