Investing.com – The Bank of Canada left its benchmark interest rate unchanged in October, it announced on Tuesday.
In a statement, the central bank said it was leaving its overnight cash rate unchanged at 1.00%, in line with expectations.
According to the BoC, the global economy has slowed markedly as several downside risks to the projection outlined in the Bank’s July Monetary Policy Report have been realized.
The European sovereign debt crisis has intensified, with the BoC now expecting that the euro zone will experience a brief recession. In the U.S., diminished household confidence, tighter financial conditions and increased fiscal drag are expected to result in weak real GDP growth through the first half of 2012.
The outlook for the Canadian economy has weakened since July, with the significantly less favorable external environment affecting Canada through financial, confidence and trade channels.
Overall, the BoC expects that growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases. The Bank projects that the economy will expand by 2.1% in 2011, 1.9% in 2012, and 2.9% in 2013.
The central bank added that it will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2% inflation target over the medium term.
Following the release of the data, the loonie erased gains against the U.S. dollar, with USD/CAD gaining 0.36% to hit 1.0073.
In a statement, the central bank said it was leaving its overnight cash rate unchanged at 1.00%, in line with expectations.
According to the BoC, the global economy has slowed markedly as several downside risks to the projection outlined in the Bank’s July Monetary Policy Report have been realized.
The European sovereign debt crisis has intensified, with the BoC now expecting that the euro zone will experience a brief recession. In the U.S., diminished household confidence, tighter financial conditions and increased fiscal drag are expected to result in weak real GDP growth through the first half of 2012.
The outlook for the Canadian economy has weakened since July, with the significantly less favorable external environment affecting Canada through financial, confidence and trade channels.
Overall, the BoC expects that growth in Canada will be slow through mid-2012 before picking up as the global economic environment improves, uncertainty dissipates and confidence increases. The Bank projects that the economy will expand by 2.1% in 2011, 1.9% in 2012, and 2.9% in 2013.
The central bank added that it will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2% inflation target over the medium term.
Following the release of the data, the loonie erased gains against the U.S. dollar, with USD/CAD gaining 0.36% to hit 1.0073.