OTTAWA, July 20 (UPI) -- The Bank of Canada Tuesday raised its bank-to-bank lending rate to 0.75 percent, citing a nascent economic recovery too weak to be self-sustaining.
The bank forecast economic growth in Canada at 3.5 percent for 2010 and 2.9 percent for 2011.
In 2012, the bank expects expansion of 2.2 percent.
Currently, however, "greater emphases on balance sheet repair by households, banks, and governments in a number of advanced economies is expected to temper the pace of global growth," the bank said.
Inflation, meanwhile, is expected to remain "near 2 percent," the bank said.
While raising the rate tightens the money supply, the central bank said the rate hike "leaves considerable monetary stimulus in place, consistent with achieving the 2 percent inflation target."