C.D. Howe Institute's Monetary Policy Council Urges Bank of Canada to Hold Overnight Rate at 1.00 Percent

TORONTO, Jan. 12, 2012 /CNW/ - The C.D. Howe Institute's Monetary Policy Council (MPC) today recommended that the Bank of Canada maintain its target for the overnight rate, the very short-term interest rate the Bank targets for monetary policy purposes, at 1.00 percent at its next announcement on January 17, 2012. Weak economic indicators in Canada and abroad, and the possibility of a dramatic deterioration in Europe's fiscal and financial situation, led the MPC to call for the Bank's overnight rate to stay at 1.00 percent past mid-year, with the median call for the rate in a year's time being 1.25 percent.

The MPC is a panel sponsored by the C.D. Howe Institute to provide an independent assessment of the monetary stance most appropriate for the Bank of Canada as it seeks to achieve its 2 percent inflation target. William Robson, the Institute's President and CEO, chairs the Council.

For the full report go to: www.cdhowe.org

Kristine Gray - phone: [phone]; e-mail: [email protected]