Full statement from the Bank of Canada December 2018 decision

Governor of the Bank of Canada Stephen Poloz

The Bank of Canada announced Wednesday that it kept its benchmark interest rate steady at 1.75 percent as it digested the impact of its previous policy decisions and effect of drastically lower oil prices on the Canadian economy.

Looking at the positive side, Poloz says the latest oil-price shock also arrives at a time when Canada's economy is running close to full tilt and the unemployment rate is at a 40-year low.

Canada's central bank chief indicated during a news conference in Toronto on Thursday that he may not be able to do much to lift markets, which have slumped this week amid concerns that trade tensions between China and the US are far from resolved. Weaker oil prices and associated production cutbacks mean activity in the energy sector is set to be materially weaker than expected.

TD senior economist Brian DePratto wrote about Wednesday's rate decision in a research note: "To be sure, while everything points to a January hike being off the table, the path thereafter is less clear, and a 491-word statement does not give much to work with".

Poloz has already raised interest rates five times since mid-2017 as he tries to return borrowing costs to more normal levels - possibly as high as 3 percent, according to recent statements. But the dramatic slump in oil prices, and efforts by the Alberta government to remedy the situation with production cuts, have muddied the picture for the economy.

"The current level of interest rates remains appropriate for the time being", Poloz said Thursday in a speech at an event hosted by CFA Society Toronto. The Bank Rate is correspondingly 2 per cent and the deposit rate is 1 ½ per cent.

The bank's rate directly affects the rates that Canadian consumers get from retail banks.

"Governing Council continues to judge that the policy interest rate will need to rise into a neutral range to achieve the inflation target", said the bank, predicting inflation in coming months will ease more than previously forecast as gasoline prices fall.

The bank also said recent data show that the economy has less momentum heading into the final quarter of 2018 related to factors such as a drop in business investment that the bank largely connects to trade uncertainty last summer.

The bank expects corporate investment to improve - outside the energy sector - following last week's signing of the updated North American trade agreement, new federal tax incentives and ongoing pressure from rising demand. The bank pointed to recent downward revisions to gross domestic product data that suggested there's still some space for non-inflationary growth.

Related News:



Most liked

"Aquaman" Sequel Already In Discussion At Warner Bros
Aquaman is still weeks away from release, but Warner Bros.is apparently quite confident that we'll want to see more. Wrote another user in a popular review, "He's a technical madman".

Walgreens launches next-day prescription delivery with FedEx
PillPack is an online pharmacy which operates in all 50 USA states and offers pre-sorted dose packaging and home delivery. The Deerfield, Illinois, company started offering deliveries in several markets in October.

Saudi Lobbyists Paid For 500-Night Stay At Trump D.C. Hotel
Trump hotel execs anonymously told the Post they were "unaware at the time that Saudi Arabia was ultimately footing the bill". The veterans were campaigning against the Justice Against Sponsors of Terrorism Act , passed by Congress in September 2016.

USA gives Russian Federation 60 days to comply with nuclear treaty
Other countries, like the United States and China, are also developing directed energy platforms. NATO said it was now "up to Russia" to save the treaty.

Norway-Plus Brexit Explained For Normal People Tired Of Reading About Brexit
There are many possible outcomes of debate, including a "no deal" Brexit , a second vote, renegotiation or a new general election. If this pans out, the risk of a no-deal Brexit and the chaos that would bring with it , increases.

United States to Send Warship to Black Sea Amid Kerch Strait Tensions
The report pointed out that the move could potentially increase tensions between the United States and Russian Federation . Under the rules of the treaty, ships of non-riparian countries can not remain in the Black Sea for more than 21 days.

Trump ghostwriter ridicules belief John Kelly’s replacement will reel president in
Trump and Kelly have privately argued at times and complained about each other to confidants, sometimes in colorful language. According to Axios , Kelly will be replaced by Nick Ayers , who now works as chief of staff for Vice President Mike Pence.

Vernon Carey makes his selection between Duke, UNC and Michigan State
The Blue Devils are no stranger to getting top recruits, landing at least one top five high school player each year since 2013. He's a decorated high school player and won a gold medal with USA Basketball over the summer.

Ukraine latest: USA plane swoops on Russian Federation in 'extraordinary flight'
He said the flight was requested by the arms control directorate of the Ukrainian General Staff. "A U.S. This was the first "extraordinary" flight under the Open Skies Treaty since 2014, the Pentagon said.

Mohamed Salah becomes fastest Liverpool player to reach 40 Premier League goals
The Reds came from 1-0 behind to secure a 3-1 victory over Burnley at Turf Moor courtesy of goals from James Milner, Roberto Firmino and Xherdan Shaqiri.

Balogun lauds Brighton's fans after derby win
The Nigerian defender has however introduced into the game with the home side already ahead through a Glenn Murray penalty. Brighton are 10th in the table with 21 points while Burnley are second from bottom on nine points.

OneBlood needs donor for girl with extremely rare blood type
To their dismay, the family learned that they all weren't a match. "And that's when it became more of an alert", Mughal said. But her father hopes to one day explain to her how a group of people they did not know helped save her life .

Raptors release former NCAA assist leader after domestic violence charge
TMZ notes that Felder and the woman got into an argument the night before, resulting in him choking her and leaving visible marks. The identity of the woman has not yet been made public, but multiple sources say that Felder apparently has known her for years.

Hearn: Wilder Must Fight Joshua Next or We Might Miss The Boat
American Wilder has questioned Jack Reiss' count but Reiss says he wanted to give Fury "every opportunity". Fury also confirmed they are aiming to hold the rematch in the summer of 2019.

'Dumb' and 'lazy': Trump responds to Tillerson criticism
He told Schieffer that he believes Trump acts on instinct rather than impulse, though it sometimes appears otherwise. In some respects, that looks like impulsiveness. "I'd say, 'Here's what we can do, '" Mr Tillerson said.