Canada central bank keeps key lending rate at 0.5pc

Canada's central bank maintained its key lending rate at 0.5 percent Wednesday, saying domestic growth is likely to be weaker than expected this year despite a projected up-tick in the global economy.

"Looking through the choppiness of recent data, the profile for growth in Canada is now lower" than it had projected back in July, the Bank of Canada said in a statement.

After a weak first half of the year, the economy is expected to regain momentum through the next two years, but at a slower pace than previously forecast.

The central bank downgraded its economic outlook for 2016 by two percentage points to 1.1 percent.

In 2017 and 2018, it anticipates 2.0 percent growth, down from an earlier forecast of 2.1 to 2.2 percent.

The bank cited a slowing of housing resale activity after mortgage lending rules were recently tightened and a tax on foreign buyers introduced in Vancouver, Canada's hottest real estate market.

The Bank of Canada also said exports continue to climb but not as fast as expected in order to offset "lost ground" earlier this year.

In 2017 and 2018 exports are forecast to be slower due to lower than expected global demand, the bank said.

Investment in the energy sector, which has been hit hard by low prices and a temporary shutdown of oil sands facilities because of wildfires, the bank noted, "appears to be bottoming out."