“Overall, the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished,” the bank’s official release states. “The balance of these risks is still within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at one per cent.”
The rate has been held since September 8, 2010 and the Bank of Canada but an eventual hike may be on the horizon.
“The Bank remains neutral with respect to the next change to the policy rate: its timing and direction will depend on how new information influences the outlook and assessment of risks,” the release states.
Inflation, which has long been a factor in maintaining the rate, has improved according to the bank’s forecasts.
“Inflation is close to the 2 per cent target and is evolving as the Bank anticipated in its July Monetary Policy Report (MPR),” the release states. “Recent data reinforce the Bank’s view that the earlier pickup in inflation was attributable to the temporary effects of higher energy prices, exchange rate pass-through, and other sector-specific factors rather than to any change in domestic economic fundamentals.”
The Bank of Canada announced Wednesday it will maintain its target for the overnight rate; days before the fourth anniversary of BoC upping it to one per cent.