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No Bank of Canada move expected on interest rates, but inflation still a worry

OTTAWA - Economists don`t expect the Bank of Canada to make any sudden moves on interest rates today or change its neutral stance about future changes.

But they'll be listening closely to what the central bank has to say about weak inflation, which remains below the current trendsetting interest rate of one per cent.

Experts expect the bank to talk about the fact that inflation has been consistently below the ideal target of two per cent, but will be very careful in what they say.

They say the bank has made it clear that it doesn`t see interest rates rising any time soon, but it's concerned about disinflation, which is part of the reason why the dollar keeps losing ground.

The Canadian dollar has fallen to 91.15 cents U.S., but some say the bank isn't losing any sleep over it, because they see it as a positive for the economy.

The bank could stress that it may need to cut interest rates unless inflation rebounds, but TD economist Derek Burleton says it's unlikely they'd go that far given the concerns about household debt.

The Canadian Press


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