Bank of Canada expected to keep its rate promise-near zero levels
by NewsHound on 18/07/09 at 12:10 pm
The Bank of Canada will stick to its conditional pledge to keep its benchmark interest rate at its current near-zero level through the second quarter of next year, most Canadian primary securities dealers said on Friday.
Eight of Canada’s 12 primary dealers polled by Reuters predicted the slow pace of economic recovery will prevent the Bank of Canada from lifting its key interest rate above the current 0.25% level, an historic low, until after the first half of 2010.
“Given the state of the economy and the fact that we expect the recovery to be very mediocre and modest, there is really no need to tighten any earlier than that,” said Carlos Leitao, chief economist at Laurentian Bank Securities in Montreal.
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