OTTAWA, Province of Ontario (AFP) – Canada's central bank maintained its key lending rate at one percent Wednesday, saying advanced economies are starting to turn around but financial volatility in emerging markets has added new uncertainty.
"The global economy continues to expand broadly as expected, but its dynamic has moderated," the Bank of Canada said in a statement.
US economic momentum has been "slightly less" than anticipated since interest rates began normalizing over the summer, it said, while Europe is showing signs of a recovery and Japan looks "promising."
However, increasing financial volatility in a number of emerging markets has created uncertainty for growth.
These global economic doubts are delaying an uptick in demand for exports and investment in Canada, the bank noted.
It concluded: "As long as there is significant slack in the Canadian economy," inflation remains muted and housing sector imbalances persist, the bank said its current rate "will remain appropriate."
Analysts predicted a rate hike from near record lows in early 2015, or possibly late next year.