7/13/2016, 4:01 PM (Source: TeleTrader)
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Bank of Canada keeps interest rate at 0.5%

The Bank of Canada (BOC) decided to maintain its target for the overnight rate at 0.5%. The Bank Rate is correspondingly 0.75% and the deposit rate is 0.25%.

Real gross domestic product (GDP) grew by 2.4% in the first quarter. It is estimated, however, to have contracted by 1% in the second quarter, due to "volatile trade flows, uneven consumer spending, and the Alberta wildfires." A pick-up to estimated 3.5% is expected in the third quarter with oil production and rebuilding resuming, following the huge wildfire in Fort McMurray, Alberta, said the BOC monetary policy statement for July.

Canadian economy is expected to grow from 1.3% this year to 2.2% in 2017. Inflation in Canada was on track to return to the BOC goal of 2% in 2017.

"Despite recent volatility, the Bank expects the underlying trend of export growth to continue, leading to a pick-up in business investment. Higher global oil prices are helping to stabilize Canada’s energy sector and household spending is expected to increase moderately," said BOC.

The central bank provided its projection for the world economy: global GDP growth is projected to be 2.9% in 2016, 3.3% in 2017, and 3.5% in 2018.

In Toronto, the S&P/TSX Composite index was up 0.20% to 14,506 points at 4:00 p.m. CET.

Baha Breaking News (BBN) / ZR