Bank of Canada not seen hiking rates until Q2 2013: Reuters poll
By Jon Cook
TORONTO (Reuters) - Sluggish domestic growth and uncertainty about the global economy will likely keep the Bank of Canada from raising rates until the second quarter of 2013, according to a Reuters survey.
The Reuters poll of 42 economists and strategists released on Wednesday showed the median forecast for the next interest rate hike was pushed back by three months from the first quarter of 2013 projected in a January poll.
The results were similar to February 17 poll of Canadian primary dealers, which forecast the next rate hike would happen in the third quarter of 2013.
The Bank of Canada's target for the overnight rate - its main policy tool - has been at 1 percent since 2010.
None of the respondents expected Bank of Canada Governor Mark Carney to alter the rate when the central bank makes its scheduled interest rate announcement on March 8.
Economists predicted the central bank will stay the course to align itself more with the U.S. Federal Reserve, which has said it will likely hold rates near zero at least through late 2014.
"If the Bank of Canada moves on rates too soon it would push the Canadian dollar to the moon and that would kill our exports and possibly tip our economy into recession," said Sal Guatieri, chief economist at BMO Capital Markets.
Canada's dollar has soared along with equity markets so far this year as commodity prices have benefited from an easing of Europe's debt crisis and continued signs of a U.S. economic recovery. The currency is expected to hover around parity with the greenback for the rest of the year, a Reuters poll earlier this month showed. Continued...