Early evidence the global economy is stabilizing and growth is still expected to edge higher over the next couple of years.
The bank is now projecting growth to be just 1.7 per cent in 2019.
Lower growth prospects expected to reinforce Poloz’s strategy of moving very gradually on increases to overnight rate.
BoC concerned with NAFTA implications for inflation.
Foresees four rate hikes this year, up from the three it had previously forecast.
Poloz says economy’s unable to continue running at full tilt without the power of lower rates.
Strong economy cited, but trade deal uncertainties cast a widening shadow over its outlook.
Exports have slipped more than expected in recent months, but trade growth to pick with rising foreign demand.
Interest rates slashed in 2015 to help the economy deal with a plunge in oil prices.
Locking in at 0.5% as uncertainty continues to swirl around the US policy agenda on trade and taxation.
Bank says some US proposals would have “material consequences” for Canadian investment and exports.
Uncertainty creating a negative effect on business confidence, investment.
Concern follows news that the economy contracted at an annual pace of 1.6% in Q2.
Lower dollars absorbs some of the impact of lower commodity prices.
Cheaper access could come at a much higher cost down the road.