BoC raises overnight lending rate
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07/09/2010 10:00:00 AM
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The Bank of Canada raised its key interest rate another 25 basis points Wednesday morning, making it the third increase since June.
BoC Governor Mark Carney’s move to increase the overnight lending rate from 0.75 per cent to 1 per cent suggests the bank is confident with Canada’s economic recovery and that monetary stimulus can be relaxed.
Still, Canadian gross domestic product (GDP) didn’t meet the bank’s expectations for the second quarter, rising only 2 per cent instead of 3 per cent.
Second quarter growth represents an even sharper decline compared to the previous quarter when GDP was 5.8 per cent.
Latest Comments
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5
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Vipul Jasani on
09 Sep 2010 01:39 PM
I was expecting this in Q1 2011. Industry require some more time to recover. I expect full recovery in end of Q2 2011/ Early Q3 2011.
George Janho on
09 Sep 2010 03:15 PM
BOC is going against all economic logic in increasing the prime rate, is it to scare small home buyers and induce them to switch from variable to fixed rates? whatever the reason behind the decision, it is not fighting the slow down and not helping the economy and the housing market in particular
kashif toor on
09 Sep 2010 08:12 PM
Please, we need to increse sales , not to scare away people from purchasing, Keep rates low. no more than .25 percent. Bank Of Canada needs to reach out to the market to see what really is going on, making it hard and increasing the rate will not help anyone.
Broker on
10 Sep 2010 09:28 AM
As student loans are affected from prime. It affect burdon for canadian students studing abroad.
Dmitri on
13 Sep 2010 02:36 PM
George and Kashif, are you guys serious??? Both of you have no clue of economics and how low interest rates and high confidence levels increase household debts, which is historically high right now. If you are dealing with mortgages and real estate I suggest both of you to quit...