The Bank of Canada announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is 3/4 per cent and the deposit rate is 1/4 per cent.
Although inflation is heading back to a 2% target by next year, the global economy continues to show signs of weakness. Although the economy South of the border has picked up, they are currently in an election and economic uncertainty coupled with no major policy shifts for the rest of the year, means no significant economic changes on the horizon.
The energy sector, coupled with significant fires in Alberta’s oil sands capital Fort McMurray, will see the country pick up a very small, around 1 percent, GDP growth for 2016. The target overnight lending rate is not expected to rise for another year.