Canada central bank keeps key lending rate at 0.5 pct

(MENAFN- AFP) Canada's central bank maintained its key lending rate at 0.5 percent Wednesday, taking a cautious stance as strong economic growth at the start of the year is forecast to slow.

Indicators such as business investment, consumer spending and jobs figures are improving and "becoming more broadly based across regions," but exports continue to lag, the Bank of Canada said in a statement.

Most of Canada's exports go to its southern neighbor, the United States.

The central bank noted that US growth in the first three months of the year was weak due to "mostly temporary factors."

"Recent data point to a (US) rebound in the second quarter," it said.

At the same time, the global economy is gaining traction and is expected to "gradually strengthen and broaden."

However, "uncertainties... continue to cloud the global and Canadian outlooks," the bank concluded.

The Canadian economy, meanwhile, has "adjusted" to lower oil prices, it said. Canada is the world's sixth largest oil producer.

Inflation has temporarily fallen lower as food prices continued to decline due to heightened retail competition.

Wage growth is also "still subdued," the bank said.

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