C.D. Howe Institute's Monetary Policy Council Urges Bank of Canada to Hold Overnight Rate at 1.00 Percent
TORONTO, Nov. 29, 2012 /CNW/ - The C.D. Howe Institute's Monetary Policy Council (MPC) today called on the Bank of Canada to maintain its target for the overnight rate, the very short-term interest rate the Bank targets for monetary policy purposes, at 1.00 percent at its next announcement on December 4, 2012. The Council further recommended that the Bank hold the overnight rate target at 1.00 through December of 2013.
The MPC is a C.D. Howe Institute project that provides an independent assessment of the monetary stance most appropriate for the Bank of Canada as it seeks to achieve its 2 percent inflation target. William Robson, the Institute's President and CEO, chairs the Council.
The MPC's formal recommendations are the median votes of members attending the meeting. Members give their individual recommendations for the Bank of Canada's upcoming rate announcement, the subsequent announcement, the announcement six months ahead, and the announcement one year ahead. On this occasion, nine of the ten members in attendance called for a 1.00 percent target at the upcoming setting and one called for a 0.75 percent target. The calls for the subsequent announcement in January 2013 were the same. As the group looked further ahead, recommendations diverged. The recommendations for June 2013 ran from one call for 0.50 percent, through one for 0.75 percent and seven for 1.00 percent, to one for 1.25 percent. The recommendations for December 2013 were: one call for 0.50 percent, five for 1.00 percent, and four for 1.50 percent.
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SOURCE C.D. Howe Institute