Bank of Canada holds rates steady, citing weaker growth

Recovery still susceptible due to European debt crisis

The Bank of Canada opted to hold interest rates steady on Tuesday, citing slightly weaker-than-expected domestic growth and the risk of global financial ripple effects from Europe’s debt crisis. The Bank kept its overnight lending target at 1 per cent for the second consecutive time since October, a move widely anticipated by analysts. The Bank said in a statement that it would have to see evidence that global and domestic recoveries were gaining traction before further withdrawing stimulus to the economy with an interest rate increase. Canada’s third-quarter economic performance of 1 per cent annualized growth was below the Bank’s forecast, which may have prompted it to adopt a more dovish tone despite a higher-than-expected inflation rate at 2.4 per cent.


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