by pna
Canada's central bank, the
Bank of Canada, announced Tuesday that it is maintaining the current overnight interest rate at
1 percent.
This is the 17th consecutive time that the bank kept the rate unchanged.
The bank described a similar gloomy world economic outlook, saying global financial conditions have improved due to aggressive policy moves from major central banks.
As for the Canadian economy, the bank warned that the household debt burden is expected to rise further before stabilizing in a few years. It also expected housing activity to decline from historically high levels.
The bank said it will consider the imbalances in the household sector in its future monetary decisions.
The bank predicted exports to pick up gradually but remain below their pre-recession peak until the first half of 2014. It regarded the persistent strength of the Canadian dollar, which is influenced by safe haven flows and spillovers from global monetary policy, as one of the main challenges.
According to the bank, the economic expansion in Canada continues to be driven mainly by growth in consumption and business investment, and the economy is expected to pick up and return to full capacity by the end of 2013.
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