Bank of Canada maintains overnight rate target at 1 per cent...

As was widely expected, the Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The global economy continues to show signs of recovery with growth evident in the USA and Europe (even with the presence of some challenging banking issues in some Eurpoean countries and some challenging sovereign debts issues). There is the emergence of broader global inflationary pressures arisng from the robust demand from emerging-market economies for commodities.
The Bank of Canada projects that the Canadian economy will grow by 2.90% in 2011 and 2.60% in 2012. The BOC sees total CPI increasing to 3% in the 2nd quarter of 2011 but then retracing back to the 2% target by mid-2012. The persistent strength of the Canadian Dollar could lead to a larger decline in imports and thus lower inflation even further.