Bank of Canada keeps key rate unchanged
Posted December 8, 2009 9:59 am.
This article is more than 5 years old.
The Bank of Canada has left its key overnight interest rate unchanged at 0.25 per cent, Tuesday, warning that there are still “significant fragilities” in the economy despite a recent upswing.
The bank was widely expected to keep the low rate in place as part of an effort to provide monetary stimulus to the economy.
The low central bank rates help keep the cost of borrowing low, thus making it less expensive for companies and consumers to make purchases.
The Canadian economy grew in the third quarter, breaking a string of three consecutive negative quarters, but gross domestic product was weaker than analysts expected.
Inflation has been also been slightly higher than the central bank expected.
For those reasons, the Bank of Canada on Tuesday left its key rate unchanged from its basement-level low of 0.25 per cent.
The central bank repeated its pledge to keep rates at this level until the end of the second quarter 2010.
The Bank of Canada said it expects the economy to be on firmer ground by the second half of 2011.
