C.D. Howe Institute's Monetary Policy Council Calls for Bank of Canada to Maintain its Benchmark Interest Rate

    TORONTO, June 2 /CNW/ - The C.D. Howe Institute's Monetary Policy Council
(MPC) today recommended that the Bank of Canada hold its target for the
overnight interest rate at 0.25 percent at its next announcement on June 4,
2009. The overnight rate is a very short-term money-market rate that the
central bank targets for monetary policy purposes.
    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.
    The MPC's formal recommendation is its median vote. On this occasion, the
consensus on the desirable target at the next setting was unanimous, with all
seven members attending the meeting advocating a target of 0.25 percent.
Looking ahead to the next setting on July 21, all but one member supported
maintaining the target at 0.25 percent. When asked to look 6-12 months out,
however, the group's views diverged and individual calls were strongly
qualified by the possibility of further economic shocks: while three called
for an unchanged target of 0.25 percent, three called for a target of 0.75
percent, and one called for 1.00 percent.
    For the full release go to www.cdhowe.org

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