Bank of Canada

Bank of Canada Retains Effective 0.25% Policy Rate Floor and Pledges Continuing Canadian Government Bond Purchases

September 9, 2020

Canada’s overnight interest rates was cut by 50 basis points on three occasions during March to what central bank officials consider an “effective lower bound” of 0.25%. A statement released after this month’s policy review reaffirms the promise to begin raising the short-term interest rate “until economic slack is absorbed so that the 2 percent […] More

Markets Pausing for Next Big Theme

September 9, 2020

Equities recorded further considerable losses in Pacific Rim trading overnight but have stabilized in Europe. Share prices closed down 1.9% in China, 2.2% in Australia, 1.3% in Indonesia, 1.1% in South Korea and 1.4% in New Zealand. But the Swiss and German markets have rebounded 0.6%, and those in the U.K. and France are up […] More

Bank of Canada Kept at 0..25% Effective Floor and Substantial Quantitative Stimulus to Continue

July 15, 2020

Canada’s overnight central bank rate target was sliced three times by 50 basis points each time during March. At 0.25%, such is now at a level that officials believe to be at an effective lower boundary. In addition, monetary officials have implemented a range of liquidity facilities and asset purchase programs to ease market dysfunctionality […] More

Bank of Canada Augments Unconventional Stimulus and Releases Quarterly Monetary Policy Report

April 15, 2020

During March, the Bank of Canada cut its interest rate target by 50 basis points each on three occasions — the 4th, 13th, and 29th of the month — and declared after the last reduction that the 0.25% overnight rate level constitutes an “effective lower bound.” At today’s scheduled policy review, officials called the Canadian […] More

Third 50-Basis Point Canadian Central Bank Rate Cut Since March 4

March 27, 2020

At a regularly scheduled Governing Council meeting on March 4, the Bank of Canada’s overnight policy rate was cut to 1.25% from 1.75%, a level that had prevailed since a 25-basis point hike in October 2018. A statement released after that meeting observed that Canadian GDP was close to potential and inflation near target but […] More

Bank of Canada’s Overnight Interest Rate Cut by 50 Basis Points to 2-Year Low

March 4, 2020

Today’s decision predictably follows the Fed’s easing by a day and represents a trend reversal in interest rates. The last five overnight rate changes in July 2017, September 2017, January 2018, July 2018 and October 2018 were hikes of 25 basis points each, and the last cut happened in the summer of 2015. The new […] More

Bank of Canada Maintains Overnight Interest Rate Target at 1.75%

January 22, 2020

This month’s meeting of Canadian monetary policymakers coincided with the release of an updated quarterly Monetary Policy Report. The released policy statement announcing that the key interest rate is being kept at 1.75% acknowledges a softer-than-anticipated patch of economic growth in late 2019 due to a number of factors including strikes, inventory adjustments, poor weather […] More

Bank of Canada’s Overnight Interest Rate Target Left at 1.75%

October 30, 2019

The 1.75% overnight central bank interest rate in Canada constitutes a post-Great Recession high and has been at that level since an increase in October 2018. Officials consider that rate level still appropriate and noted today a number of resilient elements in Canada’s economy related to the labor market, household income trends, and housing. But […] More

Bank of Canada Holds Fire and Leaves Policy Interest Rate Unchanged at 1.75%

September 4, 2019

Canada’s overnight target rate has been 1.75% since the last of five 25-basis point hikes spaced between July 2017 and October 2018. With one after another central banks caving in to the global trends of slower growth, subdued wage and price pressure, and falling long-term market interest rates, the Bank of Canada Board stood its […] More

Canadian Monetary Stance Deemed Appropriate… No Changes Made

May 29, 2019

Just five weeks separated the last meeting of the Bank of Canada’s Governing Council on April 24 and this week’s, and officials decided to maintain the overnight rate target at 1.75% as was expected. A released statement observes that the economic landscape has evolved as anticipated in three notable areas: 1) domestic demand is picking […] More