MW: Bank of Canada leaves rates unchanged at 0.25%
By Nick Godt
NEW YORK (MarketWatch) -- The Bank of Canada on Tuesday said it kept its overnight rate target at 0.25% and repeated its conditional commitment to keep it there until the end of the second quarter of 2010. "Global economic and financial developments have been somewhat more favourable than expected at the time of the July Monetary Policy Report (MPR), although significant fragilities remain," the BOC said. The Canadian dollar fell against its U.S. counterpart after the announcement. One U.S. dollar fetched CAD$1.0368, up 0.8%. The bank also said growth is expected to be slightly higher in the second half of this year than previously projected, but to average slightly lower over the balance of its projection period. The Canadian economy is expected to grow by 3% in 2010 and 3.3% in 2011, after contracting by 2.4 per cent this year. The bank said closing Canada's output gap, and reaching its inflation target of 2%, won't happen until the third quarter of 2011, one quarter later than it projected in July.
