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Bank of Canada will keep interest rates on hold

The Bank of Canada will keep rates on hold until the third quarter of next year amid slow global growth and the risk that Europe's debt crisis will linger on, according to a Reuters survey released Tuesday. The poll of 40 economists and strategists showed the median forecast for the next interest-rate increase was pushed back by three months from the second quarter of 2012 projected in an August poll.

Analysts said the central bank need to raise borrowing costs is less than they previously thought because the domestic economy has not recovered strongly and the European debt crisis still dampens the global outlook. "There is slightly more slack left in the Canadian economy than where it was presumed a couple of months ago, based on how the second quarter panned out," said Mark Chandler, head of Canadian fixed-income and currency strategy at Royal Bank of Canada.

Source: Financial Post

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