FXstreet.com (Barcelona) - The Bank of Canada has announced its decision to maintain its target for the Overnight Rate unchanged at 3%, while the Bank Rate remains at 3,25%.

The Bank affirms that economic developments have been broadly in line with the expectations, in spite of a projection for inflation slightly shifted for the upside. Canadian economy has continued growing although the composition of US growth has not supported demand for Canadian products positively.

At the same time, according to the Bank, commodity prices have increased sharply, while most of the downside risks to inflation have eased and the evolution of credit has been in line with expectations.

GDP has declined in the first quarter, and the Bank considers that Canadian economy is operating in excess supply. The bank expects economic growth to pick up this year and accelerate in 2009, as US economy recovers.

Consumer prices will continue growing around a 3% year on year pace, if energy prices continue at the current level, although, with economy running in excess supply, core inflation is expected to remain 2% through 2009.