Credit in Canada tightens in first quarter: polls
OTTAWA (Reuters) - Canadian credit continued to tighten in the first quarter of this year and businesses see their sales, investment and hiring activity weakening over the next year, two Bank of Canada surveys showed on Monday.
The central bank's survey of senior loan officers and its business outlook survey showed that both borrowers and lenders believe it became harder to get credit in the first quarter. But that perception was slightly less widespread than it was late last year when the balance of opinion -- those reporting tighter credit minus those reporting easier credit -- was at a record high.
Sentiment among most senior business managers remained negative for the year to come, although slightly less so than in the fourth quarter.
Despite the glimmer of improvement, the survey results did not point to any clear bottoming-out of the Canadian economy, analysts said.
"While growth is unlikely to turn the corner until late this year at the earliest, at least this provides further evidence that the deepest declines may be behind us," said Doug Porter, deputy chief economist at BMO Capital Markets.
The information will help the central bank decide its next move on interest rates and a possible foray into other nonconventional measures as it seeks to lift the economy out of recession.
The Bank of Canada will announce its next interest rate decision on April 21, either keeping its overnight lending target unchanged at a historic low of 0.5 percent or possibly cutting it one last time to 0.25 percent.
On April 23 the bank will provide details of other policies it could adopt beyond interest rate cuts, such as buying government or corporate debt in the open market to lower longer-term rates. These measures are known as quantitative easing.
It is not yet known if the bank feels the need to follow through on any of these measures. Continued...