Bank of Canada keeps base rate unchanged, follows guidance on timing of hikes | WSAU News / Talk 550 AM · 99.9 FM

By Julie Gordon and David Ljunggren

OTTAWA (Reuters) – The Bank of Canada on Wednesday kept its key overnight interest rate at 0.25%, as expected and maintained its guidance that the first hike could happen in October. 4 year 2022.

The central bank, in a regular interest rate decision statement, also said “devastating flooding” in British Columbia last month, cutting off access to the country’s largest port and possible coronavirus variant Omicron. hinder economic activity.

It said: “(This) could hurt growth by compounding supply chain disruptions and reduced demand for some services.

However, it noted that recent data showed that the Canadian economy had “significant momentum” in the fourth quarter, with job vacancies high and wage growth picking up.

The central bank said it continues to expect inflation to continue to rise in the first half of 2022, falling back to its target rate in the second half.

Key inflation has been above the central bank’s control range of 1% to 3% for seven months, as congested global supply chains and high energy prices boost prices.

“The effects of these restrictions on prices are likely to take some time to fully resolve, given the current supply backlog,” the central bank said. .

It reiterated that it will keep interest rates at record lows until the recession is absorbed and the 2% target is reached sustainably, which it expects to happen in the middle of the year. year 2022.

The Canadian dollar traded almost unchanged at 1.2641 against the greenback, or 79.11 US cents, regaining its previous gains.

(Reporting by Julie Gordon in Ottawa; editing by Jonathan Oatis) Bank of Canada keeps base rate unchanged, follows guidance on timing of hikes | WSAU News / Talk 550 AM · 99.9 FM

Dais Johnston

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