As expected — the Bank of Canada left interest rates unchanged as the economy limped past the finish at the end of 2018.
“Recent data suggest that the slowdown in the global economy has been more pronounced and widespread than the Bank had forecast in its January Monetary Policy Report,” said the Bank of Canada, in a news release.
“While the sources of moderation appear to be multiple, trade tensions and uncertainty are weighing heavily on confidence and economic activity.”
The Bank of Canada expects the economy will be weaker in the first half of 2019 compared to its January projection.
“The tone of the statement shifted the BoC from a recent hawkish bias to one that addresses the weakness and uncertainty for growth through at least the first half of 2019. This is now a more dovish central bank,” Philip Petursson, chief investment strategist at Manulife Investments, told Yahoo Finance Canada.
“We expect the BoC to be on hold through the first half of 2019, if not the full year. We would expect the loonie to fall further over the near term.”
The Canadian dollar fell in the moments after the announcement.
The overnight interest rate stays at 1.75 per cent — where it’s been since October after the central bank hiked it five times since the middle of 2017.
No economists polled called for a hike. Some expect the next move to be a hike, while others think a cut is a real possibility.
Bank of Canada Governor Stephen Poloz will not be doing a press conference today or provide new economic forecasts.
Deputy Governor Lynn Patterson will provide an economic progress report tomorrow.