The Bank of Canada will maintain its rate

The Bank of Canada announced today it will maintain its overnight rate at 1% – while also hinting at the future withdrawal of that stimulus.

“In Canada, while global headwinds continue to restrain economic activity, underlying momentum remains at a pace roughly in line with the economy’s production potential,” writes the Central Bank in its rate review statement. “Economic growth is expected to pick up through 2013, with consumption and business investment continuing to be its principal drivers, reflecting very stimulative financial conditions.”

The current conditions, at least globally, don’t paint quite so rosy a picture. The bank points to “widespread slowing of activity across advanced and emerging economies,” a plodding US economy and a recession-rife Europe.
 These factors will continue to keep interest rates low which will allow Canadians to borrow money at record lows.  BoC is not expected to raise the overnight rate until 2013.