The country’s central bank is maintaining its trend-setting interest rate at 0.5 per cent, it said Wednesday, citing rebounding oil prices and improved economic conditions.
“Prices of oil and other commodities have rebounded in recent weeks,” the Bank of Canada said ina statement, also noting that “Canada’s GDP growth in the fourth quarter was not as weak as expected.”
There was little expectation of a change to its overnight rate target among economists as the bank awaits details of the federal budget.
MORE: The biggest threat to Canada isn’t plunging oil — it’s debt
The announcement comes two weeks before a federal budget that is expected to open the spending faucets for infrastructure projects in an effort to stimulate the economy.
During its monetary policy report in January, the central bank lowered its economic growth projection for this year to 1.4 per cent from two per cent.
Governor Stephen Poloz said at the time that any fiscal measures contained in the federal infrastructure spending plan could bump that forecast.
MORE: Ottawa can afford to inject $35 billion of stimulus into economy