The Bank of Canada clung on Wednesday to its year-long message that its next move on interest rates would be a hike, staying the course in the final decision under outgoing Governor Mark Carney and leaving any change in stance to his successor.
As expected, the central bank
held the key policy rate at 1 percent, extending a nearly three-year
freeze on rates, the longest since the 1950s.
It cited continued
slack in the economy, a muted outlook for inflation, and slower debt
buildup by Canadian households as justification for keeping rates
unchanged for now.
The "considerable monetary policy stimulus
currently in place will likely remain appropriate for a period of time,
after which some modest withdrawal will likely be required," it said.
Governor Carney is stepping down and will begin a five-year term as Bank of England governor on July 1.
central bank is the only one in the Group of Seven industrialized
nations to signal that its next move will be a rate increase, while the
U.S. Federal Reserve and other central banks continue to pump stimulus
into the global economy through massive bond-buying campaigns after
slashing rates to zero.
Economists don't expect an increase until the final quarter of 2014,
according to a median forecast of 34 analysts in a Reuters poll earlier
Source: Louise Egan and Randall Palmer, Reuters