Tuesday, June 5, 2012

Bank of Canada keeps key rate steady at 1 percent

    Canada's central bank maintained its key overnight rate at 1 percent, balancing a weakening global economy against continued expansion in the domestic economy. The Bank of Canada added that it may still tighten monetary policy to keep inflation close to its 2 percent target if the domestic economy continues to expand.

    "The timing and degree of any such withdrawal (of monetary policy stimulus) will be weighed carefully against domestic and global economic developments," the bank said in a statement. "The outlook for global economic growth has weakened in recent weeks. Some of the risks around the European crisis are materializing and risks remain skewed to the downside. This is leading to a sharp deterioration in global financial conditions."
    The Bank of Canada's next decision on rates is on July 17.



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