Bank of Canada makes interest rate decision, holds steady at 1.75 per cent
Posted October 30, 2019 1:00 am.
Last Updated October 30, 2019 8:51 am.
OTTAWA — The Bank of Canada delivered an interest-rate decision today, posting fresh projections and providing the first public comments by its senior figures since before the federal election campaign.
The central bank held its policy rate at 1.75 per cent, where it’s been set for just over a year.
In its decision, the bank called this “appropriate,” though it is cutting its growth forecasts for the next two years.
The Bank of Canada leaves it key interest rate at 1.75% and continues to walk the data-drawn line about the future, but to me seems dovish. Listen to @martinmacmahon on @NEWS1130 for moves in the dollar, and the BoC Monetary Policy Report. pic.twitter.com/eW6fyBOtnV
— Richard Dettman (@rwdettman) October 30, 2019
It says it expects slower growth in the second half of 2019 to “below its potential,” citing “uncertainty associated with trade conflicts, continuing adjustment in the energy sector” and “unwinding of temporary factors” from the second quarter.
Markets are focused on what could happen in the coming months — and they will study governor Stephen Poloz’s take on the state of the Canadian and global economies.
Some of the most-prominent indicators — such as strong employment and healthier wages — have underlined Canada’s resilience.
Bank of Canada expects slower growth in 2nd half ‘19 to “below its potential,” cites “uncertainty associated with trade conflicts, continuing adjustment in the energy sector” and “unwinding of temporary factors” from Q2. Business investment is miserable:
(BMO chart from onite) pic.twitter.com/NtOYwNQtkj— Richard Dettman (@rwdettman) October 30, 2019
BMO chief economist Douglas Porter wrote in a recent report that both the Bank of Canada and the U.S. Federal Reserve have rate decisions on the same day for the first time since 2000, when Canada’s central bank started fixing its rate announcement dates.
He says many experts believe it will be unsustainable for the Bank of Canada to keep its rate at this level for long.
During the election campaign, the central bank chose to move itself into a quiet mode to avoid making any possible impact — or the appearance of an impact — on the political contest.