The Bank of Canada said on Tuesday that Canada's economy has started to recover from recession and will return to growth next year.
In updating its economic outlook, the bank said the Canadian economy will shrink by 2.3 percent this year, far better than the 3-percent fall it had expected in April.
And it said the economy will advance by a healthy 3 percent next year, a half-point better than its April projection.
The central bank also announced it is reducing the amount of money it is injecting into the credit system to support lending, saying credit conditions have improved a lot.
The bank said it will keep its key policy rate at the lowest possible level of 0.25 percent and will keep it there until the spring of 2010.