Central Bank Leaves Key Rate Unchanged, Decides to Remain on Sidelines
Canada’s central bank (Bank of Canada) announced today that it will leave its target for the key overnight rate unchanged at 0.5%. It has remained unchanged since middle of 2015. The Canadian economy is not showing signs of requiring more or less stimulus. The Bank’s announcement included an indication that there could be a change as the U.S. economy continues to rebound as expected through the latter part of the year 2017. The Canadian economy appears to be adjusting to lower oil prices although exports are not where it was thought they should be at this point with the lower Canadian currency value.
Interest rates need to remain low for the short to medium term. Barring unforeseen growth and higher economic activity we do not see rates rising until well into 2018.
The Prime rate of interest at major Canadian FI’s should remain at 2.7%