NewsAlert:Bank of Canada keeps key rate unchanged at 1.75%

Bank of Canada

"We no longer expect the Bank of Canada to hike its policy interest rate in January". This indicates they believe there could be more excess capacity in the economy than policy makers had been estimating and implies less of a need for rate increases.

The Bank of Canada today maintained its target for the overnight rate at 1 ¾ per cent.

Despite the hold, the central bank plans to continue the gradual tightening initiated in 2017.

Poloz has already raised interest rates five times since mid-2017 as he tries to return borrowing costs to more normal levels - possibly as high as 3 percent, according to recent statements.

But the timing of upcoming rate increases, the bank said, will now depend on several new factors that have emerged in recent weeks.

"The current level of interest rates remains appropriate for the time being", Poloz said Thursday in a speech at an event hosted by CFA Society Toronto.

Lower growth prospects are expected to reinforce Bank of Canada Governor Stephen Poloz's strategy of moving very gradually on increases to its overnight rate.

Government tax takes at record high with France in top spot - OECD
The tax-to-GDP ratio rose in 19 of the 34 OECD countries that provided data for 2017, and the OECD average is higher than ever. Taxes in Korea were found to be relatively less burdensome past year compared to other OECD countries.

In announcing its decision, Canada's central bank said that it still needs time to fully assess the impact of its previous interest rate increases, as well as the effects of lower oil prices on the domestic economy before making any further adjustments to interest rates. Bloomberg News forecasts that there is a 50% chance of a rate hike in January 2019.

On oil, the central bank blamed the steep slide in prices on the combination of geopolitical developments, uncertainty about the outlook for global growth and the expansion of American shale oil production.

Recent data, the bank noted, also show the economy has less momentum heading into the final quarter of 2018. But the dramatic slump in oil prices, and efforts by the Alberta government to remedy the situation with production cuts, have muddied the picture for the economy. The bank says it's related to factors such as a drop in business investment, which it largely connects to the significant uncertainty around trade last summer.

Poloz pointed to an unexpected decline in business investment over the summer as a key development - but he said the dive in oil prices has been the most-important "new shock".

The bank also notes it will be watching for positive developments such as signs the economy can still expand without stoking inflation.

Meanwhile, the data, on the inflation front, appears to be meeting expectations, as core measures continue to track two percent, and headline inflation is likely to ease due to lower gasoline prices.

Related News:



Most liked

Saudi lobbyists 'bought 500 nights at Trump's hotel after 2016 polls'
Trump hotel execs anonymously told the Post they were "unaware at the time that Saudi Arabia was ultimately footing the bill". He said the lobby group employed by the Saudis, Qorvis MSLGROUP, spent money like no veterans group he had ever worked with.

Watch Russia Unveil Its Brand New Laser Weapon
The Russian defence ministry posted a video of the weapon back in July, before it had officially entered service. The laser combat system was named Peresvet after Alexander Peresvet, a medieval Russian warrior monk.

Frenkie de Jong poised to move to Paris Saint Germain: Telegraaf
De Jong has been linked with a move away from Ajax in recent weeks, with Barcelona and Juventus also said to be interested. And de Jong has admitted he himself is an admirer of Guardiola's passing-based style of football.

5-star Center Vernon Carey Jr. commits to Duke
Carey's commitment to Duke continues what has been an elite run of recruiting at the program under Mike Krzyzewski since 2013. Carey, 6-foot-10, is a standout five-star recruit and one of the best big men from the class of 2019.

Hope grows for peace in Yemen
Saudi Arabia has come under heavy USA pressure since the killing of Khashoggi, and the Houthis are under intense financial strain. At the Moment, but it is still not far-reaching peace negotiations, but "consultations", said Griffiths.

Italian Police Arrest 'Godfather' of Sicilian Mafia in Major Operation
In a throwback to Cosa Nostra's 1980s heyday, the mobsters were in the habit of delivering severed goats' heads to... In 1992, Falcone and another top prosecutor - Paolo Borsellino - were blown up in Mafia hits.

Protesters march through Paris amid fears of new violence
Meanwhile, Macron seemingly has gone missing as his government tries to curb the chaos caused by his unpopular gas-tax plan. Macron's "cardinal sin", in the eyes of the protesters, was slashing wealth taxes shortly after taking office.

Despite Trump's tariffs, USA trade deficit at 10-year high
Growth in imports for November slowed sharply to 3.0 percent from a 21.4 jump in October, and far missed analysts' forecast of 14.5 percent.

Former Cavs Guard Arrested for Choking Woman
The 2016 NBA Draft pick has bounced around the NBA and G League, but his latest stop is immediately over. He's reportedly been released and is due back in court later in December.

Arsenal players filmed using 'hippy crack', Football News & Top Stories
Shkodran Mustafi and Sead Kolasinac are also seen in the video with balloons in their mouths, which is how the gas is ingested. Around 70 girls were invited to join the Arsenal stars in London's Tape club, as the party racked up a bill of nearly £30,000.

Manchester United players and Jose Mourinho have 'no problems' - Matteo Darmian
Lucas Torreira is an example for Arsenal players due to his high level of physical condition , according to Unai Emery. Paul Merson is backing Arsenal to ease to a 3-0 win against Huddersfield Town at The Emirates on Saturday afternoon.

James Corden Serenades Jeff Goldblum in ''Thank U, Next'' Parody
Ian Malcom, and it's Goldblum himself filming from the audience. 'So that journal with all the pictures of me. "No... Corden then exclaims, "I'm so frickin' grateful for his pecks". "It's for a friend. promise".

Officer died of friendly fire in Thousand Oaks shooting
It was that sixth round which struck Helus in the chest and heart and ultimately killed him, authorities reported Friday morning. Two of the rounds struck the vest, "but only near the edge of the vest, so in my mind, decreasing protection provided", he said.

Six people killed in Italian nightclub stampede
Three girls, two boys and a mother who had accompanied her child to the event, died in the incident. La Repubblica newspaper quoted a survivor as saying that at least one of the exits was blocked.

Alleged Samsung Galaxy S10 Images Leak Highlighting Triple Rear Cameras
The Exynos model will ship to Europe and India, while the Snapdragon unit will be available in the U.S. and China. As for the objective of the notch, it would hide the front-facing camera, as you can see in the leaked photo.