Bank of Canada keeps interest rate at 1%
The Bank of Canada kept its trendsetting overnight interest rate at one per cent today, the same place it's been for the last 29 policy meetings.
Known as the target for the overnight rate, the central bank's main rate dictates the rate that banks pay to each other for short-term loans. But it impacts the rates that banks offer to borrowers and savers in the real economy, for things like mortgages and savings accounts.
The rate hasn't changed since September 2010.
Although indicators don't seem to have changed enough, in the bank's view, to warrant a change to the rate, a closer look at the language of the statement that accompanied the decision offers a hint at the bank's line of thinking.
Bank of Canada governor Stephen Poloz and his deputies appear to be a little less worried about overly low inflation, too high house prices and household debt. They also seem more confident in the sustainability of the recovery, and that stronger U.S. demand and the lower Canadian dollar will start to benefit exporters, particularly manufacturers.
The bank now expects the Canadian economy to expand by 2.3 per cent this year and 2.5 next.
