Investing.com – The Bank of Canada (BoC) decided to keep its benchmark interest rate on hold at a record low in December, it announced on Wednesday.
As expected, the BoC said it was leaving its overnight cash rate unchanged at 0.50%, a record low where it has been since July 2015.
The Canadian monetary authority also held the bank rate steady at 0.75% and left the deposit rate at 0.25%.
The BoC admitted that global economic conditions had strengthened, in line with its forecasts from last October.
“However, uncertainty, which has been undermining business confidence and dampening investment in Canada’s major trading partners, remains undiminished,” it added.
Though the Canadian monetary authority indicated that the country’s economy had rebounded strongly in the third quarter, it forecast “more moderate growth” in the final three months of the year, adding that “business investment and non-energy goods exports continue to disappoint.”
The bank noted that total CPI inflation picked up in recent months but is slightly below expectations, largely because of lower food prices.
"Core inflation is close to 2% because the effect of persistent economic slack is still being offset by that of past exchange rate depreciation, although the latter effect is dissipating," it said.
"Overall, the Bank’s Governing Council judges that the current stance of monetary policy remains appropriate," the BoC concluded.
Following the press release, which was released simultaneously with the U.S. JOLTS, the loonie edged lower. Specifically, USD/CAD was trading at 1.3267 from around 1.3281 ahead of the announcement.