The Bank of Canada (BoC) today announced that they will be leaving their Key Overnight Lending Rate at 1% therefore influencing the Prime lending rate with major institutions to stay the same at 3%. This is the second announcement in a row that BoC has done so.
The bottom line is that because inflation seems to be in check right now, the Bank of Canada is currently more concerned with the persistent strength of the Canadian currency, especially to the US dollar, and they are concerned about Canada's continued lagging productivity among world economies. Canada has been the darling economy of the world throughout the credit crisis induced recession, because of its strong banking system. The Canadian economy will eventually get hit if we can not improve productivity and ensure that our currency does not get irrationally over valued.
