The Bank of Canada maintains overnight rate to 1.75%

La Banque du Canada maintient le taux directeur à 1,75%

OTTAWA – The Bank of Canada has maintained Wednesday the target rate financing to one day to 1.75 percent.

The official rate of discount remains at 2 percent, and the deposit rate to 1.5 percent.

The central bank has explained by way of a press release that “the global economic expansion continues to moderate, and it is expected that the growth will increase from 3.7 per cent in 2018 of 3.4 per cent in 2019”.

In particular, she adds, the growth in the United States remains strong, but is expected to slow down to a pace that is more sustainable over the course of 2019. However, there are growing signs that the trade conflict between the United States and China weighs on global demand and commodity prices.

The central bank warns that “the fall in global oil prices has an important effect on the outlook for canada”.

However, she continues, “these developments occur in the context of a canadian economy that shows good results overall. The growth is located near its potential, job growth has been strong and the unemployment is at its lowest level in 40 years”.

The bank anticipates a real GDP growth of 1.7 percent in 2019, or 0.4 percentage point less than in its outlook of October. This revision reflects a temporary slowdown in the fourth quarter of 2018 and the first quarter of 2019.

The measures of inflation is fundamental to remain concentrated near 2 percent.

Considering all of these factors, the central bank believes that the interest rate will have to increase with time up to within a range of neutral to ensure the achievement of the inflation target.

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