Bank of Canada kept interest rates at level of 0.50%

Bank of Canada kept interest rates at levels of 0.50%, which resulted in collapse of the local currency against the US dollar to 1.3005. Several hours later, the governor of the bank made a statement for the growth of the country, which in turn turned positive attitude of market participants to the Canadian currency. The pair USD/CAD finally finished the last day of the level of 1.3132. The governor of Bank of Canada, Stephen Poloz, reduced his forecast for growth in Canada in his statement and said that the government will introduce more stringent measures regarding the granting of mortgage loans. The bank added that inflation in 2017 will reach the level of 1.9% in the previous projections on their part to growth of 2.1%. Although Canada suffered from the decline in oil prices, it is expected the investment in the energy sector to rebound from their current lows.

“There is a balance somewhere, but I can tell you we’re pretty far away from that point. Canada is in a very good fiscal situation, so we shouldn’t be worrying about [going into greater deficit or debt] at this time”, said the governor of the Bank of Canada, Stephen Poloz. “Uncertainty is something you can’t really go out and address. But you can do things that instill extra confidence. One thing we can do is lower interest rates. But our bigger picture is we’re trying to make sure our economy is stable and growing”, added he.

Even the rise in oil prices by 2.60% did not helped the Canadian currency. The growth of the black gold was caused by the unexpected results from the US Department of Energy. The oil reserves in USA decreased by 5.25 million barrels last week, while estimated were for growth of 2.2 million barrels. Thus oil reached 15-month high, as the price was additionally supported by the statement of the Minister of Energy of Saudi Arabia, who said that many countries outside the OPEC cartel would support a freeze in production.

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