The Bank of Canada today announced that it is maintaining its target for the overnight rate at 0.5%. The Bank Rate is correspondingly 0.75% and the deposit rate is 0.25%.
Canada's central bank lowered its economic growth forecasts due in large part to slower near-term housing resale activity and a lower trajectory for exports.
The Bank expects Canada’s real GDP to grow by 1.1% in 2016, down from 1.3% previously projected, and about 2% in both 2017 and 2018, down from previous estimates of 2.2% and 2.1%. “This projection implies that the economy returns to full capacity around mid-2018, materially later than the Bank had anticipated in July,” the BoC said.
Bank of Canada said export weakness during the first half of 2016 continues to outweigh more recent improvements. "Recent export data are improving but are not strong enough to make up for ground lost during the first half of 2016, despite the effects of the Canadian dollar’s past depreciation," the Bank of Canada said in a statement.