The Bank of Canada announced today that it is keeping the overnight rate unchanged. The Bank continues to believe that increases will be required to achieve their inflation target, but that the pace of increases depends on many factors, including the effect of higher interest rates on consumption and housing, global trade developments, the persistent oil price shock, and the evolution of business investment. The next rate-setting day is Wednesday, January 9th.
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.