OTTAWA – The financial institution of Canada is anticipated to create its latest announcement on rates of interest later today.
And while there is little expectation of a switch to its overnight rate target, economists will be searching for any clues regarding how the central bank views the economy.
The Bank of Canada’s key rate of interest stands at 0.5 percent after being cut twice last year.
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The announcement comes fourteen days before a federal budget that is expected to open the spending faucets for infrastructure projects in order to stimulate the economy.
During its monetary policy report in January, the central bank lowered its economic growth projection for this year to 1.4 percent from two per cent.
Governor Stephen Poloz said at that time that any fiscal measures within the federal infrastructure spending plan could bump that forecast.
CIBC chief economist Avery Shenfeld said in a research note last week that he expects the financial institution to provide a “dovish” message in the announcement.
“The Canadian economy still has a doughnut hole in the centre, but there’s some fresh icing around the rest of it. The hole is the space vacated with a plunge in energy sector investment spending and the resulting job losses within the oilpatch, both of which are slated to carry on, with the recent climb in crude immaterial to date,” Shenfeld said.
“However the icing has been that the rest of the economy looks a little brighter than some expected, and that exports are beginning to supply a necessary lift.”
