Says EU and U.S. debt crises creating global economic uncertainty
The Bank of Canada has decided to keep the country’s overnight interest rate steady on Tuesday, citing economic uncertainty in the U.S. and Europe. Canada’s key interest rate will remain at the record low of one per cent. Economists had been split in their predictions of what central bank governor Mark Carney would do with the overnight borrowing rate. Many thought the bank would boost the rate in July because of rising household debt and inflation. But in a statement on Tuesday, the bank said the debt crises in the U.S. and Europe create an uncertain international economic situation that could affect Canada. In response to the bank’s decision, the loonie jumped to $1.053 U.S. by mid-morning Tuesday.