The Bank of Canada held the overnight rate at 5%.
Prime holds steady at 7.20%
In today’s highly anticipated announcement, the Bank of Canada (BOC) has decided to maintain its key % interest rate at 5%.
This is great news for Canadians, as many are already struggling with the increased interest rates on variable and adjustable rate products.
The decision comes in response to recent evidence suggesting a weakening Canadian economy.
Here’s a breakdown of the key takeaways from the BOC’s announcement:
Holding Steady: Despite expectations of potential rate hikes, the central bank opted for stability, citing concerns over the weakening demand in the Canadian economy.
Rate Hikes Need More Time to Take Effect: The BoC acknowledges that the full impact of past rate increases is yet to be realized, and it is acting
with caution to support economic stability as time is needed to achieve the desired effect.
Conservative Canadians: Canadians are renowned for their financial conservatism, which is evident in the consistently low mortgage default rates we maintain in Canada.
A Prudent Decision for Uncertain Times: The BOC’s decision to maintain its key interest rate at the current level is seen as a prudent move, given the ongoing economic uncertainties.
This is a slight pause for now. Before the following BOC announcement on October 23, 2023, we will receive two CPI (Inflation updates): September 19 and October 10.
Therefore, it’s too early to make any predictions as to what will happen on October 23, 2023,
BoC repeated that it remains concerned by the persistence of underlying inflationary pressure and noted that it is prepared to raise rates again if needed.
We still have two more Bank of Canada announcements to make it through 2023.
- Wednesday, October 23
- Wednesday, December 11
It’s important to remember that the Bank of Canada statement that it “remains concerned about the persistence of underlying inflationary pressures and is prepared to increase the policy interest rate further if needed.”
Click here to read the Full Bank of Canada Statement
The next scheduled date for announcing the overnight rate target is October 23, 2023.
Inflation numbers will be available on September 19 and October 10.
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