The Bank of Canada is leaving its key interest rate unchanged and is pointing to increased uncertainty about the timing of future rate hikes following the economy’s abrupt deceleration in late 2018.
The central bank’s trend-setting interest rate is staying at 1.75 per cent for a third-straight policy announcement – a stretch that comes after governor Stephen Poloz introduced five rate hikes between mid-2017 and last fall.
Notably, the bank’s statement today dropped language from its release in January that said it expected the rate would need to rise over time to an estimated destination range of between 2.5 and 3.5 per cent.
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The bank says it had been expecting a drop in household spending as well as weak numbers for exports and investment in oil-producing provinces over the final three months of 2018.
But it says the slowdown ended up being sharper and more broadly based than it had anticipated.
The bank says the first half of 2019 is now on track to produce weaker numbers than its projection two months ago – and that governing council needs more time to assess what has become a mixed picture.
