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Bank of Canada keeps rates unchanged, lowers GDP forecast

FXStreet (Mumbai) - The Bank of Canada (BOC) kept its target for the overnight rate unchanged today at 0.5%.

The Bank projects real GDP will grow by just over 1% in 2015 before firming to about 2% in 2016 and 2.5% in 2017. The previous forecast for 2016 and 2017 stood at 2.3% and 2.6% respectively.

Key points

Sees economy returning to full capacity around mid-2017 versus July estimate of H1 2017.

Total CPI inflation remains near the bottom of the Bank’s target range, owing to declines in consumer energy prices. The Bank judges that the underlying trend in inflation continues to be about 1.5 to 1.7%.

The Bank judges that the current stance of monetary policy remains appropriate.

Global economic growth has been a little weaker than expected this year, but the dynamics pointing to a pickup in 2016 and 2017 remain largely intact.

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