“The global economy continues to expand broadly as expected, but its dynamic has moderated,” the central bank said, adding that conditions “appear to be delaying the anticipated rotation of demand in Canada towards exports and investment.”
But it said financial volatility has increased in a number of emerging economies, with the notable exception of China, which it says is still showing "solid" economic growth.
This announcement marked the second rate policy decision that new Bank of Canada governor Stephen Poloz has presided over since taking over in June. So far, he hasn't shifted away from the monetary and interest rate policy track set by his predecessor, Mark Carney.
The Canadian economy grew by 1.7% in 2012 and the bank is estimating 1.8% expansion this year.
Even though the Bank of Canada is not officially tightening mortgage rates yet, there is some tightening under way in mortgage markets, where interest rates have begun to move up at most major banks.