OTTAWA - The Bank of Canada says it is keeping interest rates at historically low levels for the foreseeable future while shaving its previously posted expectation for the economy's performance in the first quarter and 2014 as a whole.
The decision on the interest rate won't come as a surprise to markets, which expect the central bank keeping its trendsetting overnight rate at one per cent for another year or so.
The report anticipates that Canada's economy in the just completed first quarter grew at a 1.5 per cent pace -- a full point lower than expected -- but it views the setback weather-related and temporary.
The downgrade however means the economy won't be able to match the previously anticipated 2.5 per cent growth target for 2014, and will likely now come it at 2.3 per cent. Growth is projected to pick up to 2.5 per cent next year.
The central bank says it expects the lower Canadian dollar will help the critical export sector, particularly in manufactured goods, but that the boost won't be sufficient to significantly alter the rather slow pace of growth in the economy.
It is much more confident about the outlook for energy exports however, which should provide an even greater lift to the already strong Alberta economy.
