Thursday, October 31, 2013

Bank of Canada drops rate guidance, lowers growth forecast

For the first time in 18 months policymakers have dropped any reference to borrowing costs eventually rising and therefore adopting a neutral position and waiting to see which way the economic winds blow.

The benchmark lending rate, which has remained at a near-record low of 1% since September 2010 and which has been locked in by lower-for-longer inflation and weaker-than-forecast growth.

Those policymakers — now under the leadership of Stephen Poloz, who replaced Mark Carney in June —  kept their key rate as is, and where it will likely remain until mid- or late 2015.

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