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