Bank of Canada maintains interest rate at 0.5%

The Bank of Canada has held the interest rate at 0.5 per cent even as it

downgraded its growth outlook for an economy hit by falling commodity

prices.

The central bank made the scheduled announcement as the country

adjusted to a complex mix of sliding resource prices, a falling Canadian

dollar and weaker business investment.

There were some expectations that Bank of Canada governor Stephen

Poloz would cut the rate given the poor economic forecasts.

The bank said that it maintained the already-low rate because the key

indicator in its decision — inflation — has been unfolding as expected

within its ideal target range.

The Bank of Canada lowered its economic growth forecast — as measured

by real gross domestic product — to 0.3 per cent for the final three months

of 2015.

That’s down from its October estimate of 0.7 per cent.

It also downgraded its 2016 growth projection to 1.4 per cent from its fall

forecast of two per cent.