Keeping in mind the current oil-price slump that is costing the Canadian economy millions of dollars each month and other headwinds affecting the economy, the Bank of Canada has decided to leave its interest rate unchanged.
The central bank’s move Wednesday maintains its trend-setting rate at 1.75 per cent. The decision follows the quarter-point increase at the bank’s previous policy meeting in October.
The central bank raises the interest rate to prevent inflation from climbing too high.
More hikes are a given and those hikes are dependent upon trade policies and the effect of previous interest rate hikes on housing and retail.
The bank also underlined several recent economic developments that it will now take into account.
Of particular concern is the fate of Canadian oil, the price of western Canadian oil has been hit badly due to transportation constraints and production cuts as a result.
A drop in business investment is a direct result of the uncertainty around trade last summer. -CINEWS