Bank of Canada leaves rates unchanged

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%.

BoC revised down growth forecasts “in light of a weaker outlook for business investment and a lower profile for exports, reflecting a downward adjustment to US investment spending.” Real GDP is expected to grow by 1.3% in 2016, 2.2% in 2017, and 2.1% in 2018. “The Bank projects above-potential growth from the second half of 2016, lifted by rising US demand and supported by accommodative monetary and financial conditions,” BoC said.

Overall, the risks to the profile for inflation are roughly balanced, although the implications of the Brexit vote are highly uncertain and difficult to forecast, said the BoC statement, making the current stance of monetary policy appropriate.