UPDATE 2-Bank of Canada says inflation rise hasn't shaken neutral stance

Wed Apr 16, 2014 1:32pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

* Rates on hold at 1 percent since September 2010

* Bank flags "downside risks" of weak inflation

* Sees "elevated" risk of household imbalances

* Signals it will focus on core rate inflation in 2014

* Cuts Q1 GDP growth forecast; outlook for year unchanged (Recasts with comments from Governor Poloz at press conference)

By Louise Egan and Leah Schnurr

OTTAWA, April 16 (Reuters) - Canadian central bank chief Stephen Poloz said on Wednesday an interest rate cut is still a possibility even though the bank forecasts inflation will pick up speed this year and approach its 2 percent target.

The Bank of Canada held its benchmark interest rate at 1 percent, as expected, extending a 3-1/2 year freeze on borrowing costs.

Poloz described the bank's monetary policy stance as neutral, as it has been since last October, meaning there is just as much chance of a rate cut as of a hike.   Continued...