The Bank of Canada kept its target for the overnight rate unchanged at 1.00%; also holding the Bank Rate at 1.25% and the deposit rate at 0.75%. The Bank noted: "The global economy has slowed markedly as several downside risks to the projection outlined in the Bank's July Monetary Policy Report (MPR) have been realized. Financial market volatility has increased and there has been a generalized retrenchment from risk-taking across global markets. The combination of ongoing deleveraging by banks and households, increased fiscal austerity and declining business and consumer confidence is expected to restrain growth across the advanced economies. The Bank now expects that the euro area—where these dynamics are most acute—will experience a brief recession."
Previously the Bank of Canada also held the target interest rate unchanged at its September meeting; it's last move was a 25 basis point increase to 1.00% in September last year. Canada reported annual CPI inflation of 3.2% in September, compared to 3.10% in August, 2.7% in July, 3.1% in June, 3.7% in May, and 3.3% in April, the same as March, according to Statistics Canada. The Bank of Canada has an inflation target of 2 percent over the medium term.
Canada reported year on year GDP growth of 2.2% in Q2 this year, compared to 2.9% in Q1, while "the Bank projects that the economy will expand by 2.1 per cent in 2011, 1.9 per cent in 2012, and 2.9 per cent in 2013." The Canadian dollar (CAD), also known as the Loonie, has weakened by 1% against the US dollar so far this year, while the USDCAD exchange rate last traded around 1.01. The Bank of Canada next meets on the 6th of December