BANK OF CANADA SIGNALS RATES LIKELY ON HOLD UNTIL 2014

The Band of Canada qannounced on January 23rd, 2013 that it is keeping its key policy interest rates a 1 per cent.  The Bank also stated interest rate hikes are "less imminent than previously anticipated." The Bank acknowledged that Canadian economic growth slowed more abruptly in the second half of 2012 that it had previously anticipated.

The bottom line is that economic growth is expected to remain modest but positive, consistend with low inflation and low interest rates. At the same time, growth in household deabt burdens, which the Bank has repeatedly flagged as a major risk in this low interest rate environment, is showing positive signs of topping out as housing market activity cntinues to stabilize at a more sustainable level that means the Bank is in no hurry raise interest rates anytime soon, with the first such movein that direction unlikely to be for at least another year.

As of January 23rd, 2012, the advertised five-year lending rate stood at 5.24 percent. It has been unchanged at this level since June 2012.

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