BoC September 2015 Announcement
The Bank of Canada (BoC) today has announced that it will leave their key overnight lending rate alone at 0.5%, therefore the Prime Rate of lending used by major Canadian FI’s for lending to their best business customers should remain at 2.7%.
The BoC believes that a Canadian economic upturn is occurring and that its economy is adjusting for lower oil & commodity prices. They see economic activity being underpinned by household spending and strength in certain sectors of the U.S. economy. Furthermore and maybe most importantly the BoC does not want to interfere or influence the Canadian federal election campaign that is presently underway.
A recent stock market dip has been blamed on China, but certain insiders feel that large hedge funds are just taking the opportunity to cash in on an otherwise upmarket and increase their wealth. Overall, global economic conditions seem to be improving, but at a slow pace. Interest rates will undoubtedly remain low for the foreseeable future regardless of the U.S. Fed’s desire to raise their key rate.