Investing.com – The Bank of Canada left its benchmark interest rate unchanged for the eleventh consecutive month in January, as the outlook for the global economy has deteriorated and uncertainty has increased since the bank’s previous rate announcement, it said 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 sovereign debt crisis in Europe has intensified, conditions in international financial markets have tightened and risk aversion has risen in recent weeks.
The report added that the central bank’s overall outlook for the Canadian economy was little changed from its October assessment.
The central bank estimates that the economy grew by 2.4% in 2011 and projects that it will grow by 2.0% in 2012 and 2.8% in 2013. Both total and core inflation are expected to moderate in 2012 and subsequently rise, reaching 2% by the third quarter of 2013.
With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada.
The statement added that the BoC 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 Canadian dollar held on to gains against its U.S. counterpart, with USD/CAD slumping 0.48% to hit 1.0129.
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 sovereign debt crisis in Europe has intensified, conditions in international financial markets have tightened and risk aversion has risen in recent weeks.
The report added that the central bank’s overall outlook for the Canadian economy was little changed from its October assessment.
The central bank estimates that the economy grew by 2.4% in 2011 and projects that it will grow by 2.0% in 2012 and 2.8% in 2013. Both total and core inflation are expected to moderate in 2012 and subsequently rise, reaching 2% by the third quarter of 2013.
With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada.
The statement added that the BoC 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 Canadian dollar held on to gains against its U.S. counterpart, with USD/CAD slumping 0.48% to hit 1.0129.