The Bank of Canada held 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: "On balance, recent economic indicators in Canada suggest that growth in the second half of this year is slightly stronger than the Bank projected in October. Household expenditures have more momentum than had been expected and business investment remains solid. Going forward, the weaker external outlook is expected to dampen GDP growth in Canada through financial, confidence and trade channels. The economy also continues to face competitiveness challenges, including the persistent strength of the Canadian dollar."
Previously the Bank of Canada also held the target interest rate unchanged at its October meeting; it's last move was a 25 basis point increase to 1.00% in September last year. Canada reported annual CPI inflation of 2.9% in October, compared to 3.2% in September, 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 2% against the US dollar so far this year, while the USDCAD exchange rate last traded around 1.012. The Bank of Canada next meets on the 17th of January 2012.