Bank of Canada Holds Rate at 1%

The Bank of Canada kept its benchmark interest rate steady at one per cent again, and hinted that when it chooses to change it is more like to raise than to lower it.

Last week, data showed Canada’s economy only expanded by 0.6 per cent in the fourth quarter, the slowest pace seen since the end of the recession.

In a policy statement Wednesday, Canada’s central bank said it expects economic growth to pick up the pace through 2013, driven by a recovery in exports and slightly higher domestic spending.

If that happens, the bank will eventually move to raise its benchmark interest rate, the so-called “target for the overnight rate” higher from the one per cent level it has been at for more than two years.

“The considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required,” the bank said.