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Once Again, No Rate Change!

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It's great news for variable rate holders as the Bank of Canada announced earlier today that it is keeping the overnight rate unchanged, which means the prime rate for most lenders should stay at 3%.

 

The Bank's statement noted that there is "widespread slowing of activity across advanced and emerging economies" and that in Canada "global headwinds continue to restrain economic activity."

 

As with recent releases, there was the hint that future rate hikes may be necessary through the cautionary statement that "some modest withdrawal of the present considerable monetary policy stimulus may become appropriate" in order to control inflation.

The Bank's next rate decision is scheduled for October 23.

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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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