The Bank of Canada announced that it is keeping its target overnight interest rate at 3%.
The bank stated that the 3 major reasons for keeping interest rates steady in July remained in August, namely:
the course of the U.S. economy
ongoing turbulence in global financial markets
sharp increases in commodity prices, the risk identified in
July that these prices could be weaker than assumed has materialized.
Other major points include:
In Canada, domestic demand has slowed modestly but remains strong
While total CPI inflation has moved above 3 per cent, core inflation has stayed at 1.5 per cent as expected
the Bank continues to expectthat total and core inflation will converge on 2 per cent in the second half of 2009