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Bank of Canada holds line on interest rates
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The Bank of Canada gave the market a surprise on Tuesday as it left a key interest rate unchanged amid inflation worries.* j6 f9 G9 _1 N( y2 [4 ~! I
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The central bank left the overnight rate — what the country's big banks charge each other for overnight loans — steady at three per cent.
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Many economists had forecast a cut of a quarter of a percentage point.
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The Bank of Canada is currently grappling with mixed signals — a slowing economy and inflation tensions.( S- I% W$ V* a* `2 V0 \5 M# F+ E
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The country's GDP unexpectedly contracted by 0.3 per cent annualized in the first quarter. Housing is cooling, last month's job-creation figures were the lowest this year and a couple of recent surveys show consumer confidence in Canada has fallen to a six-year low.
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On the other hand, inflation pressures are building, with oil topping at a record $139 US a barrel last week. Food prices also took a big jump in April.! }$ b5 Q8 }7 ]2 c% Z
2 E8 U" i' k) |http://www.cbc.ca/money/story/2008/06/10/bankdecisionrate.html |
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