The Bank of Canada rate remains unchanged but here is some interesting information from a recent session on Feb 18 where Jeffrey Harris (no relation), Deputy Chief Economist at CMHC provided the following tidbits. He indicated that there were developing conflicts through a decline in oil prices and increase in manufacturing for Ontario and Quebec. This places conflicting pressures on the Bank of Canada. He also stated that the deterioration in the outlook for economic growth has increased expectations of a Bank of Canada rate cut in the short term however a prolonged decline in the Canadian dollar places upward pressure on inflation through its impact on the cost of imported goods (can you say vegetables) which could put upward pressure on interest rates.
I think what we saw today reflects these comments where the Bank of Canada is standing pat on rates. While some have been predicting an decrease in the Bank rate, the prices of some goods in Canada have been increasing inflation which the Bank of Canada doesn’t want. The upcoming budget on March 22 is also projected to provide some economic stimulus (government money) to the economy.
Here is today’s article from the Globe and Mail on the Bank of Canada rate announcement which summarizes some of the comments above.