B-of-C Interest Hike Causes Loonie to Surge

Bank of Canada - front

CBJ — Canada’s big banks wasted no time in boosting their prime lending rates after the Bank of Canada’s move to hike it’s overnight trendsetting rate to an even 1%.

The banks quickly upped their prime rates from 2.95% to 3.2%.

Canadian consumers can expect to feel some immediate financial effects following the Bank of Canada’s decision. Those with variable-rate mortgages will feel the increase in the overnight rate quickly now that some financial institutions have begun pushing up their lending rates. Canadians with a fixed-rate mortgage won’t have to deal with the impact until it’s time to renew at the end of their fixed term.

Meanwhile the Canadian dollar gained more than a penny in reaction to the news and briefly hit 82 cents US — the loonie’s highest level since June 2015. The dollar later closed at 81.79 cents US, up .97 of a cent on the day.