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Bank of Canada leaves policy rate at 1.75

Bank of Canada leaves policy rate at 1.75

Posted on: 5/29/2019 | Author: ATB Financial's Economics + Research Team

​​​The Bank of Canada is leaving its policy interest rate at 1.75 per cent. This marks the fifth announcement date in a row that the Bank has decided to leave the rate steady. The last time the rate changed was on October 24, 2018, when it went from 1.5 per cent to its current 1.75 per cent. Inflation is expected to stay around two per cent.

According to the Bank, “recent data have reinforced Governing Council’s view that the slowdown in late 2018 and early 2019 was temporary, although global trade risks have increased. In this context, the degree of accommodation being provided by the current policy interest rate remains appropriate.”

The Bank’s decision is good news for a provincial economy that is forecast to grow by less than one per cent this year and for the many Albertans who are carrying debt.

As always, it's unclear what the Bank will do going forward. The next fixed announcement date is July 10, 2019, with three more to follow before the end of the year. Those announcements are scheduled for September 4, October 30 and December 4.

Some commentators argue that, barring a dramatic shift in economic conditions, the rate is unlikely to be changed until after the federal election scheduled to take place on or before October 21, 2019.

Bank of Canada interest rate, graph​ ​

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