NEWS

Bank of Canada keeps key interest rate at 1%

12/04/2012 09:14 EST | Updated 02/03/2013 05:12 EST
The Bank of Canada today maintained its benchmark interest rate at one per cent, the same level it has been at for more than two years.

The benchmark is the rate at which retail banks and other lenders set their borrowing rates for consumers.

It marks the 18th consecutive policy meeting that the bank has opted to stand pat, but the first since Bank of Canada governor Mark Carney announced last week he will leave his post next year to head England's central bank.

That's the longest stretch that Canada's monetary policy has gone unchanged since the 1950s.

Tuesday's move was also in line with what economists were expecting, as Canada's economy continues to eke out sluggish growth — not enough to warrant a rate hike to slow things down, but also not poor enough to require a rate cut to get things flowing again.

The loonie rallied slightly on the announcement, gaining about a fifth of a cent to trade just above parity with the U.S. dollar, at 100.08 cents US.

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