Bank of Canada holds rates steady, citing weaker growth

The Bank of Canada opted to hold interest rates steady on Tuesday, citing slightly weaker-than-expected domestic growth and the risk of global financial ripple effects from Europe’s debt crisis. The Bank kept its overnight lending target at 1 per cent for the second consecutive time since October, a move widely anticipated by analysts. The Bank said in a statement that it would have to see evidence that global and domestic recoveries were gaining traction before further withdrawing stimulus to the economy with an interest rate increase. Canada’s third-quarter economic performance of 1 per cent annualized growth was below the Bank’s forecast, which may have prompted it to adopt a more dovish tone despite a higher-than-expected inflation rate at 2.4 per cent.

Reuters