(Adds details on housing, uncertainty, oil price adjustment)
By Andrea Hopkins and Leah Schnurr
OTTAWA, May 24 (Reuters) - The Bank of Canada held interest rates steady on Wednesday, as expected, saying that while economic growth was likely to moderate in the second quarter, government measures to rein in the housing market have not yet had a substantial effect.
The central bank kept the benchmark interest rate at 0.50 percent, saying data suggests that very strong growth in the first quarter of the year will be followed by "some moderation" in the second quarter.
Reiterating its position that excess capacity remains in the economy and wage growth is subdued, the bank nevertheless noted strong spending by Canadians along with a housing boom and job growth.
"Consumer spending and the housing sector continue to be robust on the back of an improving labor market, and these are becoming more broadly based across regions," the bank said in a statement accompanying the interest rate decision.
The bank said inflation was broadly in line with its projection in April despite temporary downward pressure from lower food prices. While noting Canada's exporters still face "competitiveness challenges," it said recent indicators of business investment were encouraging.
Fearful of a housing bubble, governments have tightened mortgage lending rules and imposed a foreign buyers tax in Vancouver and Toronto. Bank of Canada Governor Stephen Poloz has previously said gains in home prices in those cities are unsustainable, and speculation was probably a factor. Household debt compared with income is at a record high.
The central bank said the recent actions had contributed to more-sustainable debt profiles but "have yet to have a substantial cooling effect on housing markets."
The global economy continues to gain traction, while U.S. growth is expected to rebound in the second quarter after temporary weakness in the first, the bank said, although uncertainties around trade protectionism and political risk continue to cloud the outlook.
Canada's adjustment to lower oil prices is largely complete, and recent data has been encouraging, the bank said.
It said all three of its measures of core inflation remained below 2 percent, and wage growth was subdued, consistent with ongoing excess capacity in the economy.
"All things considered, Governing Council judges that the current degree of monetary stimulus is appropriate at present, and maintains the target for the overnight rate at 1/2 percent," the statement concluded.