The Financial Post reports in its Thursday, May 28, edition that the Bank of Canada left its key interest rate untouched on Wednesday, saying it needs more time to assess the impact of the oil price collapse and a weaker-than-expected U.S. economy. The Post's Gordon Isfeld writes that it appears that another rate move is not in the cards for now.
Governor Stephen Poloz continues to stress the fallout from the plunge in crude will be "front-loaded" and stall Canadian growth in the first quarter of this year, before picking up over the next three-month period.
The BOC said in a statement: "While a weak first quarter in the United States has raised questions about that economy's underlying strength, the Bank expects a return to solid growth in the second quarter. ... Risks to financial stability remain elevated, but appear to be evolving as expected. ... If these developments are sustained, their net effect will need to be assessed as more data become available in the months ahead."
The wording of Wednesday's statement supported the view that any rate adjustment in Canada will come later rather than sooner.
Most economists agree the next rate move will be an increase, but that will not happen until early 2016.
© 2024 Canjex Publishing Ltd. All rights reserved.