While persistent trade tensions are affecting global economic momentum, the Bank of Canada announced today that it is keeping its benchmark rate unchanged. While growth in Canada has been strong, the Bank expects this to be temporary with economic activity expected to slow in the remainder of the year. The Bank believes the current accommodative interest rate policy to be appropriate, although they will be closely watching how the ongoing trade conflicts will impact Canadian growth and inflation.
The Bank also noted that housing activity has regained strength, supported by demand and lower interest rates. While this may add to already high debt levels, they believe current mortgage rules will help contain the risk associated with higher household debt.
The next rate-setting day is Wednesday, October 30th.
Source: Invis Financial