Bank of Canada keeps interest rate at one per cent

OTTAWA, Ont. – The Bank of Canada has left its trendsetting interest rate at one per cent.

Meanwhile earlier on Tuesday, the Canadian dollar traded at its highest level since Nov. 16, 2007, Tuesday, at 103.06 cents (U.S.).

The central bank said the economic recovery is proceeding slightly faster than it had expected, but there’s still plenty of slack in the economy.

It adds that risks are still high, citing the strong loonie as an anchor weighing down expectations for more robust growth.

The bank said while inflation is emerging as a problem in many parts of the world, in Canada underlying price pressures remain subdued.

The decision means Canadians will likely be able to continue borrowing at historically favourable conditions until at least mid-April, when the central bank is scheduled to again consider whether such super-low rates are appropriate for the economy.

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