CBC News - The Bank of Canada held its benchmark interest rate steady at one per cent on Tuesday, the sixth straight time the bank has opted to stand pat. "The global economic recovery is proceeding broadly as expected," the bank said in a statement posted on its website Tuesday morning. High energy prices and tax changes have kept underlying inflation relatively subdued, it said. The bank also cited increased household borrowing and spending as potential contributors to inflation, but the persistently high Canadian dollar could mitigate that, and put downward pressure on the economic recovery. The dollar was up almost a cent to trade at 103.36 cents US in the minutes after the rate decision was announced. "Reflecting all of these factors, the bank has decided to maintain the target for the overnight rate at one per cent," the bank said. After keeping its target for the overnight rate at a record low of 0.25 per cent through most of the recession, the bank hiked the rate by a quarter of a percentage point at three straight policy meetings in June, July and September 2010 before holding steady ever since. The rate has a large impact on the rates banks offer to businesses and consumers for borrowing and saving. While it declined to do so on Tuesday, the bank left the door open to rate hikes in the near future. "To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn," the bank said. "Such reduction would need to be carefully considered." The bank's next decision on interest rates is due on July 20.
Asif Khan, Sales Representative
Re/Max Hall of Fame
Re/Max All-Stars Realty Inc., Brokerage
Asif Khan, Sales Representative
Re/Max Hall of Fame
Re/Max All-Stars Realty Inc., Brokerage