Interest Rate Canada
September 8, 2011 by staff
Interest Rate Canada, The Bank of Canada held on Wednesday its key interest rate on hold but warned that the uncertain global economic slowdown and increased financial means monetary stimulus will need to continue for now.
The central bank said the debt crisis in Europe “intensified” and the volatility of financial markets “increased sharply” amid a global slowdown in economic growth.
“Reflecting these factors, the bank decided to maintain the goal of the overnight low one percent,” he said in a statement.
Many economists have ruled out a move in rates until the second quarter of 2012 or even later.
“In light of slowing global economic momentum and greater financial uncertainty, the need to remove the stimulus from monetary policy has diminished. The Bank will continue to monitor developments carefully economic and financial conditions in global and Canadian economies, along with evolution of risk, and set monetary policy consistent with achieving the (bank) two percent inflation target over the medium term. ”
The Canadian economy contracted 0.4 percent in the second quarter of this year, the Bank of Canada said it was “largely due to temporary factors.”
During an appearance last month before the House of Commons Finance Committee, Bank of Canada, Mark Carney, head to recognize that the economy was slowing, but said he expected to lead to a recession.
He said it was unlikely that Europe and the United States is a major economic recession.
The bank had previously forecast growth of 2.9 percent in 2011 and 2.6 percent in 2012.
On Wednesday, the central bank said that although the Canadian economy stagnated in the second quarter, it still expects that “growth will resume in the second half of this year.”
That growth will be led by business investment and household spending, “despite a lower wealth and income are likely to moderate the growth rate of investment and consumption,” the bank said.
He said that financial conditions in Canada have “snug and could strengthen further,” if global financial conditions’ continue to deteriorate. ”
The bank also said that Canadian exports “are expected to remain a major source of weakness, reflecting the more modest global demand and the current challenges of competitiveness, in particular, continued strong Canadian dollar.”
Please feel free to send if you have any questions regarding this post , you can contact on
Disclaimer: The views expressed on this site are that of the authors and not necessarily that of U.S.S.POST.