Daily Update (Source: RBC Financial Group
Bank of Canada holds overnight rate at 1.00% and says policy is appropriate
Oct 22, 2014
- Bank of Canada maintained the overnight rate at 1.00%, as was expected.
- Risks to inflation outlook are “roughly balanced.”
The Bank of Canada met expectations today by holding the overnight rate at 1.00% and couched the outlook in terms of the risks to the inflation projection, which were deemed “roughly balanced” and for which a 1.00% policy rate is appropriate. Furthermore, the Bank stated that “underlying inflationary pressures are muted” attributing the run up in the core measure to “unexpected sector-specific factors.” The headline rate is running in line with the Bank’s projections with lower energy prices offsetting the sector-specific price increases. The recent drop in energy prices resulted in the Bank lowering its forecasts for the headline inflation rate while the core rate is
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