BoC keeps interest rate unchanged at 1% in September

FXStreet (Łódź) - In line with forecasts, the Bank of Canada decided to maintain its target for the overnight rate unchanged at 1% at its September monetary policy meeting. The bank rate remained at 1.25% and the deposit rate at 0.75%.

In a statement released after the decision was made known, the BoC said that inflation, currently near the 2% target accelerated due to "energy prices, exchange rate pass-through, and other sector-specific factors rather than to any change in domestic economic fundamentals."

Canadian Q2 GDP has strengthened in line with the central bank's predictions, but a sustained expansion needs to be seen "before it will translate into higher business investment and hiring."

Due to the fact that "the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished" the BoC decided that keeping its target for the overnight rate unchanged at 1% was an appropriate move this month.