Analysts at ANZ note that the BoC dropped its nominal neutral interest rate to a range of 2.5% to 3.5% (from 4.5 to 5.5%).
Key Quotes
“Being a small open economy, it views the Canadian neutral rate as a function of the global neutral rate, plus a country specific risk premium. For the global neutral rate it believes it has declined and is likely to remain low over the long-term.”
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