UPDATE 2-Bank of Canada holds rate-hike bias, eyes on Poloz

Wed May 29, 2013 12:17pm EDT
 
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* Rate hike still likely after a period of time-central bank

* First-quarter growth beats expectation, inflation weaker

* Carney stays course ahead of exit to run Bank of England

By Louise Egan and Randall Palmer

OTTAWA, May 29 (Reuters) - The Bank of Canada clung on Wednesday to its year-long message that its next move on interest rates would be a hike, staying the course in the final decision under outgoing Governor Mark Carney and leaving any change in stance to his successor.

As expected, the central bank held the key policy rate at 1 percent, extending a nearly three-year freeze on rates, the longest since the 1950s.

It cited continued slack in the economy, a muted outlook for inflation, and slower debt buildup by Canadian households as justification for keeping rates unchanged for now.

The "considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required," it said.   Continued...