BoC left overnight rate target unchanged at 1.75% as widely expected. The central bank said the Canadian economy has been “resilient” but indicators since October have been “mixed”. Globally, the economy is showing “signs of stabilization” with “positive” trade developments. But “there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences.”
BoC left the option of rate cut open, and said the “Governing Council will be watching closely to see if the recent slowdown in growth is more persistent than forecast.” Special attention will be paid to consumer spending, housing and business investment.
In the Monetary Policy Report, 2020 GDP forecast was revised down from 1.7% to 1.6%. But 2021 GDP growth is revised up from 1.8% to 2.0%. 2020 CPI projection was revised up form 1.8% to 1.9%. 2021 CPI projection was left unchanged.