Investing.com - The Bank of Canada held interest rates steady on Wednesday, as expected, saying that the Canadian economy’s adjustment to lower oil prices is largely complete.
The BoC kept the cash rate unchanged at 0.50% in a widely anticipated decision. It also held the bank rate steady at 0.75% and left the deposit rate rate at 0.25%.
The Bank said recent economic reports, including indicators of business investment, have been encouraging.
“Consumer spending and the housing sector continue to be robust on the back of an improving labor market,” the bank said in a statement accompanying the decision.
Noting the overheated Toronto housing market, the bank said “macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets.”
The bank has kept rates unchanged since cutting rates twice in 2015 and the prolonged period of low borrowing costs has been blamed for helping inflate the housing market, particularly in Toronto, Canada's largest city.
The Canadian dollar moved higher following the announcement, with USD/CAD trading at 1.3475 by 10.00 ET from around 1.3521 earlier.