UPDATE 3-Bank of Canada sees broadening recovery, oil price risk
(Adds comments from Bank of Canada governor at Toronto event)
By Randall Palmer and Leah Schnurr
OTTAWA Dec 3 (Reuters) - The Bank of Canada held its main policy rate at 1 percent on Wednesday, declaring that while Canada's economic recovery is broadening to include exports and business investment, lower oil prices could cut inflation more than expected.
The bank's statement was seen as slightly more optimistic than recent communiques, and it helped boost the Canadian dollar. Economists were cautious, however, about how much of a bearing it would have on the timing of any policy tightening by the bank.
"It's a pretty even-handed policy statement. For every good thing there's an offsetting bad thing," said BMO Capital Markets senior economist Sal Guatieri, who held to his forecast of a rate increase next October.
Bank of Canada Governor Stephen Poloz has long looked for the driver of the economy to rotate from the overstretched consumer to exports and then business investment.
Noting that stronger exports were beginning to be reflected in increased business investment and employment, the statement said this suggests "the hoped-for sequence of rebuilding that will lead to balanced and self-sustaining growth may finally have begun." Continued...