Bank Rate Watch – April 12, 2017

This week, on its scheduled date; Wednesday April 12th, the BoC decided to hold the line on any change to the key overnight lending rate that it controls for settlement between major Canadian FI’s.  Subsequently the prime rate with major Canadian FI’s has not moved.

In recent months the US counterpart to BoC (the US Federal Reserve Bank) has moved up its key rate.  This shows the difference between the two countries’ economies at this time.  Pressures on the Canadian economy, lack luster growth forecasted and excess capacity explain the lack of interest by the BoC to raise its rate anytime soon.  If we see resource prices, and oil especially, rise in the near future, then we may see the the BoC start to think differently, but as for now they are staying the course with a their Key rate at 0.5% (Prime rate at 2.7%).  The last time the BoC changed its Key rate was July 15, 2015.