Article content

The Bank of Canada kept its benchmark interest rate unchanged at 0.5 per cent in a rate decision Wednesday in Ottawa.

Policy makers led by Governor Stephen Poloz gave a nod to improving economic data and added new language stating “the current degree of monetary stimulus is appropriate at present.”

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Holding like a hawk: Top takeaways from the Bank of Canada rate decision today Back to video

The Canadian dollar jumped on the report, gaining 0.3 per cent to C$1.3466 per U.S. dollar at 10:08 a.m. in Toronto.

Key Points

The Bank of Canada reiterated its assessment that subdued inflation and wage growth is consistent with “ongoing excess capacity in the economy.” At the same time, it said the economy’s adjustment to the oil price decline is “largely complete” and that “recent economic data have been encouraging” — with a “robust” labor market driving consumer spending and housing.

Critically, it changed its policy language to add a time element and the word “stimulus.” In the April 12 statement, that language had been that “Governing Council judges that the current stance of monetary policy is still appropriate.” The last time it used the “current degree” of stimulus language was in the May 2015 statement, which immediately preceded a July 2015 rate move — which was a cut at the time.