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The Bank of Canada (BoC) released its interest rate decision on Wednesday. The central bank kept its interest rate unchanged at 0.50%, noting that the current monetary policy is appropriate. This decision was expected by analysts.
The BoC said that inflation in Canada was driven by lower consumer energy prices.
The central bank noted that the Canadian economy rebounded, supported by household spending.
The BoC lowers its growth forecasts for 2016 and 2017 as lower prices for oil and other commodities weigh on the Canadian economy. The real GDP growth is expected to be 2% in 2016, down from the previous estimate of 2.3%, and 2.5% in 2017, down from the previous estimate of 2.6%.
"The Canadian economy can be expected to return to full capacity, and inflation sustainably to target, around mid-2017," the BoC said in its statement.
Risks to the country's financial stability are evolving as expected, and risks around the inflation are roughly balanced, the central bank said.
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