In a widely expected decision, the Bank of Canada maintained its target for the overnight rate at 1.75%. Below are some key takeaways from the BoC's policy statement:
The BoC stresses that "global economic growth has slowed by more than the bank forecast in its January Monetary Policy Report (MPR)". It also mentions, though, that "global economic activity is expected to pick up during 2019 and average 3 ¼% over the projection period, supported by accommodative financial conditions and as a number of temporary factors weighing on growth fade".
About the domestic situation, the BoC says that "in Canada, growth during the first half of 2019 is now expected to be slower than was anticipated in January", mentioning that "weaker-than-anticipated housing and consumption also contributed to slower growth".
The BoC also updates their growth and inflation forecasts: "overall, the Bank projects real GDP growth of 1.2% in 2019 and around 2% in 2020 and 2021", and expects inflation to remain around 2% through 2020 and 2021".
The conclusion from the BoC statement is rather dovish: "given all of these developments, Governing Council judges that an accommodative policy interest rate continues to be warranted", adding that "we will continue to evaluate the appropriate degree of monetary policy accommodation as new data arrive".
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