Canada CB Keeps Rates Steady

The Bank of Canada Wednesday maintained its target for the overnight rate at 1.25%. The bank rate is correspondingly 1.5% and the deposit rate is 1%, Bank of Canada press release said. In Canada, the national accounts data show that the economy grew by 3% in 2017, bringing the level of real GDP in line with the projection in the bank’s January Monetary Policy Report. In the fourth quarter, GDP growth was slower than expected, largely due to higher imports, while exports made only a partial recovery from their third-quarter decline. The gain in imports mainly reflected stronger business investment, which adds to the economy’s capacity. Strong housing data in late 2017, and softer data at the beginning of this year, indicate some pulling forward of demand ahead of new mortgage guidelines and other policy measures. Inflation is running close to 2% target and the bank’s core measures of inflation have edged up, consistent with an economy operating near capacity. Wage growth has firmed, but remains lower than would be typical in an economy with no labor market slack.