Mubasher: The Bank of Canada (BOC) has decided to keep its benchmark interest rate unchanged at 1.75%.

The global economic expansion is moderating largely as expected, but signs are emerging that trade conflicts are weighing more heavily on global demand, the bank said in its monetary policy statement on Wednesday.

Recent encouraging developments at the G20 meetings are a reminder that there are upside as well as downside risks around trade policy.

Growth in major advanced economies has slowed, although activity in the United States remains above potential.

Oil prices have fallen sharply since the October Monetary Policy Report (MPR), reflecting a combination of geopolitical developments, uncertainty about global growth prospects, and expansion of U.S. shale oil production.

The move was largely expected by analysts and market experts.

In October, the bank hiked interest for the fifth time since the June 2017.

“The Canadian economy as a whole grew in line with the Bank’s projection in the third quarter, although data suggest less momentum going into the fourth quarter,” the statement noted.

Inflation has been evolving as expected and the Bank’s core measures are all tracking 2%, consistent with an economy that has been operating close to its capacity.