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Bank of Canada holds rates, cuts growth forecast as trade conflicts drag on
[OTTAWA] The Bank of Canada maintained its key overnight interest rate at 1.75 per cent as expected on Wednesday but cut domestic and global growth forecasts, saying the Canadian economy would be increasingly tested by trade conflicts.
The central bank, which has kept rates unchanged since October 2018 as counterparts around the world ease, said the current level of stimulus remained appropriate and made no mention of future moves.
In its first policy announcement since Prime Minister Justin Trudeau retained power in an election last week, the central bank said trade tensions were helping cut business investment and commodity prices.
"Governing Council is mindful that the resilience of Canada's economy will be increasingly tested as trade conflicts and uncertainty persist," it said.
The bank revised its 2019 Canadian growth projection upwards to 1.5 per cent from 1.3 per cent while reducing its 2020 and 2021 forecasts to 1.7 per cent from 1.9 per cent and 1.8 per cent from 2.0 per cent respectively.