Bank of Canada raises concerns about economy, holds interest rate at 0.5%
OTTAWA — The Bank of Canada struck a note of caution Wednesday as it held its key interest rate target steady at 0.5 per cent and raised concerns after the export sector disappointed earlier this year.
“While the strength in exports during July was encouraging, the ground lost over previous months raises the possibility that the profile for economic activity will be somewhat lower than anticipated,” the central bank said in its rate announcement.
The central bank said the risks for inflation have “tilted somewhat to the downside” though remained roughly in line with its expectations, with total inflation below the two per cent target and measures of core inflation around two per cent.
TD Bank economist Brian DePratto said the Bank of Canada’s tone was more dovish than he expected.