Bank Rate Remains 1.75%
CBJ — The Bank of Canada put the brakes on any immediate rate hikes this morning, preferring instead to keep its overnight trendsetting rate at 1.75%.
Prior to today, the central bank had raised its key rate five times since the summer of 2017, attempting to keep inflation in an acceptable range, typically between 1% and 3%, and ideally somewhere around 2%. The bank last raised its rate in October, before deciding to do nothing in December and then again today.
The bank’s rate impacts consumers by raising or lowering the rates that Canadian borrowers and savers get for lines of credit, savings accounts, and variable-rate mortgages.
The bank also downgraded its expectations for Canada’s economy this year. A 25% decline in the price of oil since October has had a definitive impact on the economy, to the point where the bank is now forecasting just 1.7% growth this year. Three months ago, it was expecting 2.1%.