Prime Rate Held at 0.25%
The Bank of Canada has held its key interest rate at 0.25% as of this morning. This was widely expected as the Bank has stated that it wants to keep rates down until at least this summer.
Next Bank of Canada Prime Rate Announcement
A quick update. The next Bank of Canada prime rate announcement will be on March 2, 2010. Subscribe to this blog to receive automatic prime rate updates. Thanks.
Bank Of Canada Interest Rate – December 2009
The Bank of Canada has left its key overnight interest rate unchanged at 0.25 per cent.
The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/4 per cent. The Bank Rate is unchanged at 1/2 per cent and the deposit rate is 1/4 per cent.
While significant fragilities remain, global economic developments have been slightly more positive and the global outlook has improved modestly relative to the Bank’s projection in its October Monetary Policy Report (MPR).
In Canada, as expected, the composition of aggregate demand is shifting towards final domestic demand and away from net exports. In the third quarter, the balance of these shifts resulted in weaker-than-projected GDP growth. Core inflation in recent months has been slightly higher than the Bank had projected, although total CPI inflation remains close to projections.
The main drivers and the profile of the projected recovery in Canada remain consistent with the Bank’s views in the October MPR. The Bank continues to expect economic growth to become more solidly entrenched over the projection period and inflation to return to the 2 per cent target in the second half of 2011.
Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target. In its conduct of monetary policy at low interest rates, the Bank retains considerable flexibility, consistent with the framework outlined in the April MPR.
The risks to the outlook for inflation continue to be those outlined in the October MPR. On the upside, the main risks are stronger-than-projected global and domestic demand. On the downside, the main risks are a more protracted global recovery and persistent strength in the Canadian dollar that could act as a significant further drag on growth and put additional downward pressure on inflation. The Bank views all of these risks through the prism of achieving the 2 per cent inflation target.
While the underlying macroeconomic risks to the projection are roughly balanced, the Bank judges that, as a consequence of operating at the effective lower bound, the overall risks to its inflation projection are tilted slightly to the downside.
from Reuters
Bank of Canada Prime Rate Announcement Due Tomorrow
The Bank of Canada’s next interest rate announcement comes tomorrow, Tuesday December 8 at 9:00 AM EST
Check back here for tomorrow’s announcement.
Related Story:
“Bank of Canada Governor Mark Carney’s pledge to freeze record-low borrowing costs through June may be raising the chances of a bubble in home prices even as it helps the economy recover from its first recession in 17 years.
Sales of existing houses rose 74 percent in October from the January low, with prices up 21 percent from a year ago to a record C$341,079, partly because of Carney’s promise — the only date-specific commitment from a Group of 20 central banker. To prevent the economy from overheating, Carney will raise his benchmark rate by 125 basis points to 1.5 percent in 2010, while Federal Reserve Chairman Ben S. Bernanke will keep his key rate at 0.25 percent, said Stephen Gallagher, chief U.S. economist in New York at Paris-based Societe Generale SA.”
“The central bank hasn’t talked much about house prices, “to the bafflement of international investors,” said Eric Lascelles, chief economist and rates strategist with TD Securities Inc. in Toronto. The bank’s next opportunity comes tomorrow in an interest-rate announcement scheduled for 9 a.m. New York time.”
Full story at: bloomberg.com
Canadian Prime Rate Update
In Canada and the United States, the Canadian prime rate update is by definition an interest rate used by banks. The term originated as a rate of interest for favoured customers who had good credit with their banks.
Today, the prime rate is used in calculating some variable rate loans. This can often include secured lines of credit like home equity loans, and most credit card rates are also based off of the prime rate. Variable interest rates may be listed as above or below prime rate. Prime rates do not change often, only when banks need to alter lending rates. The prime rate is typically the same from bank to bank, however it can vary slightly. Banks usually adjust prime at the same time.
The prime rate is also a factor when determining the state of the economy. With the following Canadian prime rate update, it shows a possible upturn in Canada’s economic crisis which can have implications to other countries throughout the world as they face tough economies and recessions as well. More »
Bank of Canada Prime Rate – September 2009
The Bank of Canada released its latest economic outlook today.
“Stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are supporting domestic demand growth in Canada,” the bank said in a statement Thursday.
“Combined with recent information on inventory adjustments and automotive production, this suggests that GDP growth in the second half of 2009 could be stronger than the bank projected in July.”
The central bank’s comments came as it released its latest interest rate policy announcement. As expected, it left its key overnight interest rate unchanged at 0.25 per cent.
The central bank reiterated its commitment to leave the key rate at that level through the middle of next year as long as inflation remains in check.
Read the full story at cbc.ca
