Bank of Canada Keeps Policy Interest Rate at 1%

The Bank of Canada kept its policy interest rate at 1 percent today, as expected, and removed the word “neutral” from its statement, saying that it’s stopping the use of “forward guidance” on the future path of interest rates for now.

The economy won’t reach full output until the second half of 2016, the bank said. Inflation will slow to an average of 1.4 percent in the second quarter of 2015, the bank said, compared with its July forecast for inflation to slow to 1.7 percent in the second quarter of 2015.

“The Bank judges that the risks to its inflation projection are roughly balanced,” policy makers led by Governor Stephen Poloz, 58, said in a statement from Ottawa. While the bank dropped a line used at its Sept. 3 decision — that it “remains neutral with respect to the next change to the policy rate” — Poloz said he will probably return to giving clues about interest rates in the future.

Bloomberg

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.