Bank of Canada interest rate remains at 0.25 per cent

Ottawa - The Bank of Canada has left its key overnight interest rate unchanged at 0.25 per cent, Thursday.

It previously said it would commit to keeping the rate fixed until at least 2010.

At its last interest rate decision in April, the central bank lowered the trend-setting rate to about as low as it could go.

The unchanged rate is unlikely to affect the rates Canadians will pay for mortgages and other loans.

In its policy announcement Thursday, the central bank said the rise of the loonie is becoming a major concern that could threaten the country's economic recovery.

The central bank also hinted it is prepared to intervene if the dollar's rise proves persistent.

It noted that while it cannot cut rates further, it has the option to resort to so-called quantitative easing, including increasing the money supply, to keep the strong dollar from strangling the recovery.

In an assessment of the economy, the bank said conditions are improving but warned the outlook remains uncertain and things could deteriorate.

Posted by Canadian Funding Corp. Read more HERE