BOK Expected to Hold Rates at 2.50% as Housing and Currency Pressures Persist 
Fed Rate Cut Odds Rise as December Decision Looks Increasingly Divided 
UK Raises Deposit Protection Limit to £120,000 to Strengthen Saver Confidence 
RBNZ Cuts Interest Rates Again as Inflation Cools and Recovery Remains Fragile 
Kazakhstan Central Bank Holds Interest Rate at 18% as Inflation Pressures Persist 
Japan’s Rising Inflation Strengthens Case for a Near-Term BOJ Rate Hike 
Singapore Maintains Steady Monetary Outlook as Positive Output Gap Persists into 2025 
The Loonie tumbled more than 12% against the USD from the middle of October 2015 through the middle of January 2016 in a more or less one-way move. Import prices are rising on the back of the weaker currency, thus also sending consumer prices higher. Inflation has thus increased markedly since spring 2015 and, at 2%, is now trading exactly at the BoC's target level.
The BoC is likely to have a closer look at the government's 2016 budget plan due to be released on 22 March. A budget which delivers significant fiscal stimulus to boost growth should be CAD-supportive and further reduces scope for BoC rate cuts.
"Against this backdrop, the BoC will probably leave interest rates unchanged next week. However, it is likely to point to numerous downside risks such as weaker US demand and a renewed drop in oil prices, thus for now leaving the door open for further interest rate cuts." notes Commerzbank in a report.
