Bank of Canada leaves policy rate unchanged at 0.25%

In a widely expected decision, the Bank of Canada (BoC) on Wednesday announced that it left its key rate unchanged at 0.25% at its September policy meeting. In its policy statement, the BoC reiterated that the economy will continue to require extraordinary monetary policy support.

Market reaction

The USD/CAD edged slightly lower and was last seen losing 0.35% n a daily basis at 1.3185.

Key takeaways as summarized by Reuters

"Will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved."

"Will continue large-scale asset purchase program at the current pace."

"Will continue until the recovery is well underway and will be calibrated to provide the monetary policy stimulus needed to support the recovery and achieve the inflation objective."

"Will continue quantitative easing (QE) program, with large-scale asset purchases of at least C$5 billion per week of government of Canada bonds."

"Both the global and Canadian economies are evolving broadly in line with the scenario in July's monetary policy report."

"Inflation is expected to remain well below target in the near term."

"Rebound in the United States has been stronger than expected, while economic performance among emerging markets has been more mixed."

"The bounce-back in activity in the third quarter looks to be faster than anticipated in July."