Bank of Canada’s view on economy will be closely watched today

OTTAWA – The Bank of Canada is anticipated to create its latest announcement on interest rates later today.

And nevertheless there is little expectation of a switch to its overnight rate target, economists will be looking for any clues regarding the way the central bank views the economy.

The Bank of Canada’s key interest rate stands at 0.5 percent after being cut twice this past year.

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The announcement comes two weeks before a federal budget that is expected to open the spending faucets for infrastructure projects in order to stimulate the economy.

During its monetary policy report in January, the central bank lowered its economic growth projection with this year to at least one.4 percent from two percent.

Governor Stephen Poloz said at that time that any fiscal measures contained in the federal infrastructure budget could bump that forecast.

CIBC chief economist Avery Shenfeld said inside a research note a week ago that he expects the bank to deliver a “dovish” message in the announcement.

“The Canadian economy still has a doughnut hole in the centre, but there’s some fresh icing around the rest of it. The opening is the space vacated by a plunge in energy sector investment spending and also the resulting job losses within the oilpatch, both of which are slated to continue, using the recent climb in crude immaterial to date,” Shenfeld said.

“But the icing continues to be that the rest of the economy looks a little brighter than some expected, and that exports are starting to provide a necessary lift.”