The Central Bank of Canada maintains its key interest rate

Ottawa: Canada’s central bank, the Bank of Canada (BoC), has decided to maintain its benchmark interest rate at 1.75 percent. The move comes as the central bank assesses the extent of the damage the worsening trade conflict will have on the domestic and global economy.

Quote BetweenOn Thursday, September 5, 2019, Canada’s central bank increased its interest rate to 1.75% in October last year, but it has remained unchanged since. A decision on unchanged interest rates was widely expected despite Canada’s strong economic rebound in the second quarter.

Last week, Statistics Canada said the country’s economy grew at an annualized rate of 3.7 per cent in the second quarter, which was higher than the central bank’s forecast of 2.3 per cent. The central bank expects a slowdown in economic activity in the second half of 2019.
It focuses on weak points, such as the sharp contraction in investment by Canadian businesses which coincided with the rise in trade tensions. It is undeniable that trade conflicts continue to put pressure on the economy and force central banks to act.

The intensifying trade conflict between the United States and China poses a greater drag on global economic momentum than the central bank predicted at its July 10 meeting, the central bank said in a statement.

The Canadian economy is moving closer to target inflation. However, the escalation of trade conflicts and the resulting uncertainty are weighing heavily on the global and Canadian economies. “In this context, the current level of monetary stimulus remains appropriate,” concludes the press release from the Canadian central bank.

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Zera Carpenter

"Typical thinker. Unapologetic alcoholaholic. Internet fanatic. Pop culture advocate. Tv junkie."

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