(BOC) Monetary Policy Report - October 2009 Summary

Highlights

Recent indicators point to the start of a global economic recovery, although significant fragilities remain.
A recovery in economic activity is also under way in Canada, although the current strength in the Canadian dollar is expected, over time, to more than fully offset the favourable developments since July.
The Canadian economy is projected to contract by 2.4 per cent this year and to grow by 3.0 per cent in 2010 and 3.3 per cent in 2011.
Inflation is expected to return to the 2 per cent target in the third quarter of 2011, one quarter later than was projected in July.
The Bank maintained its policy rate at 1/4 per cent and reaffirmed its conditional commitment to hold its current policy rate until the end of the second quarter of 2010.
As a consequence of conducting monetary policy at the effective lower bound, the Bank judges that the overall risks to its inflation projection are tilted slightly to the downside.