A woman walks past the Bank of Canada Wednesday September 6, 2017 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

A woman walks past the Bank of Canada Wednesday September 6, 2017 in Ottawa. THE CANADIAN PRESS/Adrian Wyld

Bank of Canada keeps key interest rate target on hold at 1.75 per cent

The Bank of Canada said there is early evidence that the global economy is stabilizing

The Bank of Canada kept its key interest rate on hold where it has been for more than a year as it said Wednesday that ongoing trade conflicts and related uncertainty continue to weigh on the global economy.

The central bank’s overnight rate target has been set at 1.75 per cent since October of last year.

In its rate announcement, the Bank of Canada said there is early evidence that the global economy is stabilizing and growth is still expected to edge higher over the next couple of years.

“Financial markets have been supported by central bank actions and waning recession concerns, while being buffeted by news on the trade front,” the bank said.

“Indeed, ongoing trade conflicts and related uncertainty are still weighing on global economic activity, and remain the biggest source of risk to the outlook.”

Stock markets tumbled Tuesday after U.S. President Donald Trump said he had “no deadline” to end a 16-month trade war with China that has hurt the global economy and downplayed the likelihood of reaching a deal before the U.S. elections next year.

New U.S. tariffs are set to kick in on many Chinese-made items, including smartphones and toys, on Dec. 15 in addition to taxes already being imposed on hundreds of billions of dollars worth of Chinese goods imported by the U.S.

Meanwhile, a resilient Canadian economy has allowed the Bank of Canada to keep interest rates on hold even as many of its international peers have moved to ease monetary policy amid concerns about the global economy.

Economic growth in Canada slowed in the third quarter to an annual pace of 1.3 per cent, in line with the Bank of Canada’s forecast in October. Consumer spending and housing helped support growth in the quarter, however the central bank also noted that investment spending came in stronger than expected.

Statistics Canada reported last week that growth in the third quarter came as business investment rose 2.6 per cent, its fastest pace since the fourth quarter of 2017.

“The bank will be assessing the extent to which this points to renewed momentum in investment,” the Bank of Canada said.

“Future interest rate decisions will be guided by the bank’s continuing assessment of the adverse impact of trade conflicts against the sources of resilience in the Canadian economy — notably consumer spending and housing activity.”

Changes in the Bank of Canada’s overnight rate target affect the prime rates at the big banks and in turn the rates Canadians pay for variable-rate mortgages and other floating-rate loans.

The Bank of Canada’s next interest rate decision is set for Jan. 22, when it will also update its outlook for the economy and inflation as part of its quarterly monetary policy report.

ALSO READ: Former Bank of Canada governor to serve as UN special envoy on ‘climate action’

READ MORE: Bank of Canada holds interest rate, warns economy’s resilience to be ‘tested’

Craig Wong, The Canadian Press


Like us on Facebook and follow us on Twitter.

Just Posted

Tammy Bradford, manager of the Creston Museum & Archives for the last 23 years, wants to welcome visitors to check out their exhibits and programs this summer. (Photo by Kelsey Yates)
Creston Museum encourages summer visitors to check out programs and activities

After some temporary closures of indoor exhibits due to COVID-19, the museum has re-opened to welcome visitors

The latest EKASS survey confirms a steady decline in substance use among EK youth over the years. (image compilation via Pixabay)
Latest survey show steady decline in adolescent substance use over the years

Starting in 2002, the survey has been conducted every two years to monitor changes in substance use patterns, attitudes and behaviors amongst East Kootenay youth.

Nasukin Jason Louie of the Lower Kootenay Band poses under the mural in the administration building. The mural depicts past elders David Luke, Wilfred Jacobs, Isobel Louie, Charlotte Basil, and Louis White. (Photo by Kelsey Yates)
Lower Kootenay Band announces cross-border COVID-19 vaccine clinic

In partnership with the Kootenai Tribe of Idaho, the clinic will be held on National Indigenous Peoples Day

Protestors blocking Columbia Avenue Saturday evening. Photo: Betsy Kline
Old growth protesters begin 24-hour blockade of Castlegar’s main street

Members of Extinction Rebellion plan to stay overnight

Forty sled dogs were seized by the BC SPCA from a Salmo kennel in February. A recent ruling has decided the dogs won’t be returned. Photo: Gounsil/Flickr
BC Farm Industry Review Board rules against Salmo kennel after 40 sled dogs seized

Spirit of the North Kennels was also ordered to pay BC SPCA $64,000

Canadian Prime Minister Justin Trudeau participates in a plenary session at the G7 Summit in Carbis Bay, England on Friday June 11, 2021. THE CANADIAN PRESS/Adrian Wyld
Canada donating 13M surplus COVID-19 vaccine doses to poor countries

Trudeau says the government will pay for 87 million shots to be distributed to poor countries

Indigenous Services Minister Marc Miller is seen during a news conference, Wednesday May 19, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Indigenous child-welfare battle heads to court despite calls for Ottawa to drop cases

Feds are poised to argue against two Canadian Human Rights Tribunal rulings

The Great Ogopogo Bathtub Race has been held in Summerland as a fundraising event. Do you know which Canadian city introduced this sport? (Black Press file photo)
QUIZ: A summer’s day at the water

How much do you know about boats, lakes and water?

Two-year-old Ivy McLeod laughs while playing with Lucky the puppy outside their Chilliwack home on Thursday, June 10, 2021. (Jenna Hauck/ Chilliwack Progress)
VIDEO: B.C. family finds ‘perfect’ puppy with limb difference for 2-year-old Ivy

Ivy has special bond with Lucky the puppy who was also born with limb difference

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

A million-dollar ticket was sold to an individual in Vernon from the Lotto Max draw Friday, June 11, 2021. (Photo courtesy of BCLC)
Lottery ticket worth $1 million sold in Vernon

One lucky individual holds one of 20 tickets worth $1 million from Friday’s Lotto Max draw

“65 years, I’ve carried the stories in my mind and live it every day,” says Jack Kruger. (Athena Bonneau)
‘Maybe this time they will listen’: Survivor shares stories from B.C. residential school

Jack Kruger, living in Syilx territory, wasn’t surprised by news of 215 children’s remains found on the grounds of the former Kamloops Indian Residential School

A logging truck carries its load down the Elaho Valley near in Squamish, B.C. in this file photo. THE CANADIAN PRESS/Chuck Stoody
Squamish Nation calls for old-growth logging moratorium in its territory

The nation says 44% of old-growth forests in its 6,900-square kilometre territory are protected while the rest remain at risk

Most Read