Bank of Canada to announce on interest rates

The bank is expected to keep its key interest rate target on hold at 0.5 percent, however, economists and policy makers would still be scrutinizing its outlook for the economy.

Owing to the large wildfires in Alberta which shutdown the production in the oilsands, had a grave effect on the economy in the second quarter.

Experts foresee that the economy would probably bounce back in the third quarter, but are apprehending how much of it would be carried through into the fourth quarter.

In July, the Bank of Canada in its monetary policy report, forecasted economic growth to rebound to a 3.5 percent annual pace in the third quarter, owing to the oil production and reconstruction efforts in Alberta’s oilsands region.

However, the complete growth for 2016 was predicted at 1.3 percent.

Benjamin Reitzes, Bank of Montreal senior economist believes the new monetary policy report will likely see a downgrade to economic growth for this year as the second quarter was worse than the projection made by the central bank. 

“The risk for the policy outlook remains tilted toward a cut, but the bar remains high for such a move,” Reitzes mentioned in a report.

He also explained, “The bank will be watching exports, housing, and the impact of fiscal stimulus closely over the coming months, with those three factors likely the keys for policy through at least mid-2017.”

(Reporting by Debarati Mukherjee)