UPDATE 2-Bank of Canada holds rates, dovish on inflation
* Central bank keeps overnight rate at 1 percent
* Says downside risks to inflation as important as ever
* Repeats that risks from household debt still high
* Still sees signs of soft landing in the housing market (Adds reaction, scheduling of news conference for June 12)
By Randall Palmer and David Ljunggren
OTTAWA, June 4 (Reuters) - The Bank of Canada held its main interest rate at 1 percent on Wednesday and said the risks of low inflation loom as large as ever despite a faster-than-anticipated rise in prices, remarks that some economists interpreted as being dovish.
The central bank also flagged weaker-than-expected global growth and the possibility of slightly less underlying momentum in the United States, and noted that the Canadian economy grew only modestly in the first quarter.
Economists had been watching to see if higher inflation readings in April might cause Governor Stephen Poloz to tone down his concern about low inflation, but this did not appear to be the case.
"Weighing recent higher inflation readings against slightly increased risks to economic growth leaves the downside risks to the inflation outlook as important as before. At the same time, the risks associated with household imbalances remain elevated," the bank said in its policy statement. Continued...