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Bank of Canada holds the line on interest rate

Bank of Canada holds the line on interest rate

Posted on: 4/24/2019 | Author: ATB Financial's Economics + Research Team

The Bank of Canada is keeping its policy interest rate at 1.75 per cent. In an announcement this morning, the Bank cited slower than expected global and national economic growth as key reasons for maintaining the status quo.

According to the Bank, “last year’s oil price decline and ongoing transportation constraints have curbed investment and exports in the energy sector. Investment and exports outside the energy sector, meanwhile, have been negatively affected by trade policy uncertainty and the global slowdown. Weaker-than-anticipated housing and consumption also contributed to slower growth.”

The Bank’s decision is welcome news for Albertans either looking to buy a home or who have a mortgage coming up for renewal. It’s also beneficial for those struggling with high levels of consumer debt. However, 2019 still holds five other opportunities for the Bank to change its rate, with the next announcement scheduled for May 29.

The last rate increase—from 1.5 to 1.75 per cent—was on October 24, 2018. While it’s unclear what the Bank will do over the short term, it’s eventual goal is for the rate to reach what it calls the “neutral range” of 2.25 to 3.25 per cent. To this end, the Bank will continue to monitor “developments in household spending, oil markets, and global trade policy.”

Bank of Canada Policy Interest Rate

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