Bank of Canada Holds Key Interest Rate as Government Preps for Fiscal Boost
OTTAWA – The Bank of Canada is sticking with its key interest rate as it waits to assess economy-boosting measures expected in the upcoming federal budget.
The central bank kept its trend-setting interest rate locked at 0.5 per cent in its scheduled announcement.
The bank says while stubbornly low oil prices continue to hurt the economy, it notes inflation appears on track and that 2015 closed out with better-than-expected growth.
But the Bank of Canada says financial vulnerabilities have crept higher and the commodity-price slump has left overall business investment very weak.
The bank says that next month it will evaluate the impact of fiscal stimulus measures Ottawa is expected to include in the March 22 budget.
The federal government has made billions of dollars worth of commitments, such as infrastructure spending, that it insists will help revive economic growth and create jobs.