OTTAWA, Mar. 6 (Xinhua) -- Canada's central bank held its key interest rate at 4.25 percent on Tuesday, a level that has not been changed since last May.

    "The Canadian and global economies are evolving broadly in line with the bank's expectations,'' the Bank of Canada said in a statement.

    Real gross domestic product in Canada increased in the fourth quarter of 2006 at a rate consistent with the bank's projection, while both total consumer price index (CPI) and core inflation have been largely as expected, the Bank of Canada said.

    "Total CPI inflation should average just above one percent in the first half of 2007, returning to the two percent target in 2008. Core inflation should remain near two percent throughout this period.''

    The central bank said that despite recent volatility in global financial markets, it judges the risks to its inflation predictions are roughly balanced.

    "The Canadian economy is expected to continue to operate near its production capacity through 2007 and 2008," the bank said.

    The Bank of Canada's next scheduled rate-setting date is April 24. ¡¡