The Bank of Canada (BoC) released its interest rate decision on Wednesday. The central bank kept its interest rate unchanged at 0.50%, noting that the current monetary policy is appropriate. This decision was expected by analysts.
The BoC expects the Canadian economy to expand 1.4% in 2016 and 2.4% in 2017.
Inflation is expected to rise to about 2% by early 2017 once the effect of low oil prices will dissipate.
According to the central bank, low prices for oil and other commodities weighed on the Canadian economy.
The BoC noted that the Canadian labour market remains resilient.
Risks around the inflation are roughly balanced, the central bank said.
The BoC added that "vulnerabilities in the household sector continue to edge higher".