Bank Rate Stays Still, but Economic Outlook Brighter

Things are staying put on the borrowing front, but with a bit of an upward twist this time.

The Bank of Canada is keeping its key interest rate target on hold as it raises its outlook for economic growth this year.

The central bank says its key rate remains at 0.25% where it has held steady for more than a year.

The decision came as the Bank of Canada raised its prediction for economic growth this year to 6.5%, up from an earlier forecast of 4%.

Economic growth is expected to moderate after that, according to the central bank's quarterly outlook report.

The improving conditions are why the bank also says today it will ease off federal government bond purchases which are part of its quantitative-easing program designed to aid the economy.

The Bank of Canada says it plans to keep its up its efforts to aid the economy until slack is absorbed and inflation is back at its 2% target, which the bank now sees happening later next year.