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Your
Money Matters
August
2011 Issue
Carney Releases Monetary Policy Report - Overnight interest rate
remains at 1%
Despite total Consumer
Price Index inflation up 3.7% in the 12 month period ending in May
(the largest increase since March, 2003), the Bank Of Canada held
its overnight interest rate at 1%. This announcement made on July
19th was largely expected as the Canadian economy had slowed in the
second quarter.
The bank expects it to pick up during the latter half of the year
and to see inflation head toward the target 2% rate by the middle of
2012. This suggests that there may be an interest rate hike before
the end of this year. In the short term it is expected that
inflation will continue in the 3%+ range.
The Bank made the interest rate call on the assumption that the
sovereign debt crisis in Europe will be resolved in an orderly
manner. Slow growth and debt issues in the US could cause problems
with economic projections as well.
The next interest rate announcement by the Bank of Canada is due on
September 7, 2011.
If you would like to see the full Monetary Policy Report, click on
this link:
www.bankofcanada.ca/2011/07/speeches/opening-statement-81
Source: The Knowledge Bureau
Theresa Wever and the Money Concepts Team.
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