TORONTO, Feb. 24 /CNW/ - The C.D. Howe Institute's Monetary Policy Council (MPC) today recommended that the Bank of Canada raise its target for
the overnight interest rate, the very short-term money-market rate the
Bank targets for monetary policy purposes, to 1.25 percent at its next
announcement on March 1, 2011. The Council further recommended raising
the target rate to 1.50 percent at the following announcement on April
12, 2011, followed by increases that would take it to 2.00 percent in
September 2011 and 2.75 percent in March 2012.
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. Finn Poschmann, the Institute's Vice President, Research, chaired the sixty-first
meeting of the Council.
The MPC's formal recommendations for each announcement date are its
median votes. The recommendation for March 1 reflected a split vote,
with three of the nine members attending the meeting urging an
unchanged target, and five recommending an increase to 1.25 percent and
one recommending an increase to 1.50. The range of recommendations
among MPC members tended to increase as the time horizon extended. In
their calls for the April 12 setting, two members recommended a target
of 1.00 percent, one recommended 1.25 percent, five urged 1.50 percent
and one urged 1.75 percent. Recommendations for the target in March
2012 ranged from 2.00 percent to 4.00 percent.
For the full discussion go to: www.cdhowe.org
SOURCE C.D. Howe Institute
For further information:
Kristine Gray — phone: 416-865-1904; e-mail: email@example.com.