Bank of Canada keeps interest rate at one per cent
Posted Dec 6, 2011 09:05:42 AM.
This article is more than 5 years old.
OTTAWA – The Bank of Canada is keeping its benchmark overnight rate at one per cent for a little while longer.
The central bank said Canada’s economy is performing slightly better than expected at the moment, but that will soon change.
Citing a deeper than predicted recession in Europe, spillover effects from a weaker U.S. economy and slowing growth in China, the central bank said Canada is facing considerable headwinds from beyond its borders.
The bank said Canada’s gross domestic output will be weakened by these factors going forward.
It also said inflation is higher than it would like at the moment, but it expects that will decline as food and energy prices moderate.
The overnight rate is used as a benchmark for bank prime lending rates and usually affects the cost of such loans as lines of credit, business loans and variable-rate mortgages.
