The Bank of Canada announced on September 7th, 2016 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.
The Bank acknowledged that inflation risks were “tilted more to the downside since July” when it published its most recent economic forecast. Normally, this would signal that it may lower interest rates in the near future.
However, the Bank also said it remains concerned about rising mortgage debt, throwing cold water on the idea that it might lower rates for fear of fueling further household debt.
The big picture for the Bank’s key policy interest rate remains unchanged: it will stay low for longer – likely remaining where it is when the first day of school rolls around next year and maybe beyond.
As of September 7th, 2016, the advertised five-year lending rate stood at 4.74 per cent, unchanged from the previous Bank rate announcement on July 13th and up 0.1 per cent from one year ago.
The next interest rate announcement will be on October 19th, 2016 and will be accompanied by its Monetary Policy Report which will update the Bank economic forecast.