Yesterday, the Bank of Canada announced that they are maintaining their benchmark overnight lending rate at 0.5 percent, with a corresponding prime bank rate of 2.70 percent.
The recent rebound in both oil prices and the Canadian dollar were closely aligned with the levels projected in the Bank’s most recent Monetary Policy Report, published in January of 2016. Short term outlook for the economy remains the same albeit a stronger than expected fourth quarter, and inflation in Canada is evolving as expected.
Important to note is that the federal budget is set to be released in just under two weeks, on March 22, 2016. The Bank has acknowledged the expected federal investments, citing that the impact of these measures would be evaluated in the next Monetary Policy Report in April. Bank of Canada Governor Stephen Poloz stated that the Bank’s decision to hold their key interest rate steady came after careful consideration of the federal government’s promise to allocate billions into Canadian infrastructure.
CIBC’s Chief Economist Avery Shenfeld predicts an increase in Canada’s GDP by up to 1 percent following the Liberal government’s stimulus to the economy, although he does not expect these benefits to be observed until late 2016 or early 2017.
The next overnight lending rate announcement will take place on April 13, 2016 – the same day that the Bank will release its next Monetary Policy Report. Be sure to check our blog for important industry updates that directly affect mortgage holders in Canada. For more information on the latest Bank of Canada announcement or for specific questions regarding your mortgage, feel free to contact one of our certified Mortgage Brokers today!