Bank of Canada seen holding rates, tweaking outlook

Tue Jan 19, 2010 8:45am EST
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(Repeats preview first run Jan 15 without changes)

WHAT: Bank of Canada interest rate announcement; Monetary

Policy Report (MPR)

WHEN: Tuesday, January 19 at 9 a.m. for rates

Thursday, January 21 at 10:30 a.m. for MPR

REUTERS FORECAST: All of the 11 primary dealers surveyed on Thursday forecast the Bank of Canada would stand pat on rates on Tuesday and most expect it to maintain its conditional commitment to keep the key overnight rate at its current 0.25 percent until the end of the second quarter. All see a rate hike at some point this year.

They put the median odds of the central bank intervening in currency markets over the next 12 months at 5 percent.


Outlook:The rate statement may provide clues about the timing of the bank's first rate hike by flagging any revisions to its outlook on growth and inflation, to be explained in more detail in the MPR on Thursday. Economists expect upward tweaks to the growth and core inflation forecasts for the final quarter of 2009 and early 2010, but probably nothing substantial enough to knock the bank off its conditional commitment to hold rates steady through mid-year.   Continued...