What's Bank of Canada's Latest Update?

The Bank of Canada announced today that it is maintaining its target for the overnight rate at 1%.and noted that the Canadian economy is preceding as projected by the Bank in January's Report.

While inflation and growth were slightly higher than expected in the fourth quarter of 2013, the Bank expects slack in the economy to keep inflation below the Bank's 2%target this year. 

Speculation of an impending rate cut by the Bank of Canada has receded in recent weeks following a modest acceleration of inflation and stronger than expected economic growth.

The uptick in inflation and growth is in part due to a sharply lower Canadian dollar and policymakers at the Bank have welcomed the decline in the dollar.

A depreciation in the currency tends to be inflationary and impacts consumer prices in fairly short order while traditional monetary policy, through adjusting the overnight interest rate, impacts inflation only with a significant lag of 12 to 18 months. 

The lower loonie is helping to pull inflation higher, so its expected the Bank will likely maintain its target rate at 1 per cent until 2015 when economic conditions may require a gradual increase in the overnight rate. 


March 5/14

Comments:
No comments

Post Your Comment:

* indicates required fields.
Your Name: *
Please note, your email will not be shown publicly
Your Email (will not be published): *
Comment: *
Please type the text as it appears above:
Blogs
Posts By Date
Categories
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.