C.D. Howe Institute's Monetary Policy Council Urges Bank of Canada to Hold Overnight Rate at 1.00 Percent

23 May, 2013, 14:00 ET from C.D. Howe Institute

TORONTO, May 23, 2013 /CNW/ - The C.D. Howe Institute's Monetary Policy Council (MPC) today recommended that the Bank of Canada 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 May 29, 2013. The Council further called for the Bank to hold the target at 1.00 through to May of 2014.

The MPC is a panel sponsored by the C.D. Howe Institute to provide an independent assessment of the monetary stance most appropriate for the Bank of Canada as it seeks to achieve its 2 percent inflation target. Finn Poschmann, the Institute's Vice President, Research, chaired the seventy-eighth meeting of 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 interest-rate announcement, the subsequent announcement, and the announcements six months and one year ahead. On this occasion, nine of the 11 voting members called for a 1.00 percent target next week, while two called for the Bank to lower the target to 0.75 percent. Members' votes were the same for the following setting in May. For December 2013, one member raised his target from 1.00 to 1.25 percent, with other votes unchanged. Two members called for 1.25 percent by May 2014, and another sought 1.00 percent.

For the full report go to: http://www.cdhowe.org/mpc-recommendations-may-2013/21781

SOURCE C.D. Howe Institute