Bank of Canada holds key policy rate

The Bank of Canada is once again keeping its key policy rate unchanged, noting that with weak economic growth and muted inflation our historic low rates "will likely remain appropriate for a period of time." There is now less concern about household debt levels, with the Bank noting that it "expects trend growth in household credit to moderate further, with the debt-to-income ratio stabilizing near current levels."

 

The prime rate for most lenders should stay at 3%, unchanged since September 2010.

 

The Bank's next rate decision is scheduled for April 17.

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Today’s Bank of Canada rate hold announcement marks almost four straight years that the key benchmark rate has remained unchanged, since September 8, 2010. Great news if you have a variable-rate mortgage or home equity line of credit; the prime rate stays at 3%.

 

The announcement noted that “the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished.” With these considerations, the Bank is maintaining its monetary policy stimulus, and remains neutral with respect to the timing and direction of the next change.

 

The next rate-setting day is October 22nd.

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