Bank of Canada

Bank of Canada Retains 0.5% Overnight Money Rate Target and Releases New Forecasts

April 13, 2016

A statement justifying the existing central bank interest rate structure makes seven primary assertions. First, the global economic outlook has weakened since January. Second, commodity prices are slightly above levels assumed at the start of this year, although well below historical averages. Third, the Canadian dollar has firmed. Fourth, potential non-inflationary output growth had to […] More

Bank of Canada’s Overnight Money Rate Target Left at 0.50% at Second Planned Meeting of 2016

March 9, 2016

For four and a third years from September 2010 until January 2015, Canada’s central bank interest rate had stayed at 1.0%.  The plunge in oil and other commodity prices for this commodity-intensive economy had caused a mini-recession last year to which monetary officials responded with interest rate cuts of 25 basis points each in January […] More

Bank of Canada Retains 0.50% Overnight Interest Rate Target

January 20, 2016

Central banks are in the first stage of grief over what’s transpiring in financial markets this year, and the Bank of Canada is no exception.  The take-away from today’s released statement is that policymakers are in a state of denial.  Yes, forecast adjustments have been made in the face of year-to-date declines in the Toronto […] More

Bank of Canada Retains Existing Very Accommodative Policy Stance

December 2, 2015

In the first half of 2015, Canada experienced back-to-back quarterly economic contractions, constituting a recession, but such was short-lived, as real GDP rose 2.3% at an annualized rate last quarter in spite of a 1.1 percentage point inventory drag.  Twice earlier this year in January and July, the Bank of Canada Board voted to cut […] More

Bank of Canada Maintains 0.50% Overnight Money Rate Target

September 9, 2015

The Board deliberates interest rate policy eight times per year and had cut the interest rate target at two of the five earlier meetings in 2015.  Canada experienced a real GDP contraction in each quarter of the year’s first half.  When the key rate was sliced July 15 to 0.50% from 0.75%, the action was […] More

Bank of Canada Monetary Policy Stance Eased for Second Time This Year

July 15, 2015

A famous Monty Python skit produced the line, “Nobody expects the Spanish inquisition,” and the idea applies equally well to the forecasts of public authorities particularly central banks when it comes to forewarnings about coming recessions.  In cutting the overnight money target by 25 basis points to 0.50% today, Bank of Canada officials published an […] More

Bank of Canada Left Overnight Interest Rate Target at 0.75%

May 27, 2015

The fourth of eight scheduled monetary policy meetings decided the present policy stance is still appropriate but observed that higher oil prices and a softer U.S. dollar in recent weeks, noting that “if these developments are sustained, their net effect will need to be assessed as more data become available in the months ahead.”  The […] More

No Change Made in Bank of Canada’s 0.75% Overnight Interest Rate Target

March 4, 2015

The target had been cut at the prior Governing Council Meeting on January 21, which coincided with a quarterly review of economic conditions and prospects.  The cut in January was the first rate change since a hike in September 2010 was was characterized as providing “insurance against risk of too low inflation and growth from […] More

Bank of Canada Cuts its Main Interest Rate

January 21, 2015

Canada’s overnight money rate target was cut by 25 basis points to 0.75%.  Officials acknowledged some undesirable yet unavoidable surprise to markets in this decision, which is a response to an unambiguously negative impact on Canada of the recent plunge in oil prices.  Today’s rate change was the first since the third of three 25-basis […] More

Spotlight on Central Banks

January 21, 2015

In response to disinflationary implications of the plunge in oil prices, the Bank of Canada cut its overnight money rate target to 0.75% from 1.0%.  Oil price changes also pose downside risks to growth, which is projected to fall to around 1.5% in the first half of this year, and to financial stability.  The prior […] More