Bank of Canada left today the benchmark interest rates steady at 0.25 percent in line with estimates, as the Canadian economy is still recovering from recession.

The BOC highlighted that economic activity in Canada rose above the bank’s projections, where the Canadian economy grew by an annualized 5.0% during the last quarter of 2009, which was driven mainly by rising domestic spending and rising exports.

The BOC also signaled that “the ongoing global economic recovery is being driven largely by strong domestic demand growth in many emerging-market economies”.

The BOC highlighted that monetary and fiscal policy easing indeed helped in boosting economic growth all around the globe, in addition to the “extraordinary” measures taken by central banks to support the financial system.

This policy stimulus has a major role specially that the rising value of the Canadian dollar and low demand levels from the United States continue to weigh down on economic activity.

Moreover, the BOC signaled that core inflation rose slightly above expectations due to momentarily factors alongside rising economic activity.

The BOC expects interest rates to remain unchanged through the second quarter of 2010, given that the outlook for inflation doesn’t change, as though the BOC are still focused on reviving economic growth, but they also want to keep inflationary pressures within the acceptable limits.

The BOC expects the economy to continue its recovery process well into this year before growing around its long term growth potentials in 2011.