BoC maintains overnight rate; hints at eventual change

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The Bank of Canada announced Wednesday it will maintain its target for the overnight rate; days before the fourth anniversary of BoC upping it to one per cent.

“Overall, the risks to the outlook for inflation remain roughly balanced, while the risks associated with household imbalances have not diminished,” the bank’s official release states. “The balance of these risks is still within the zone for which the current stance of monetary policy is appropriate and therefore the target for the overnight rate remains at one per cent.”

The rate has been held since September 8, 2010 and the Bank of Canada but an eventual hike may be on the horizon.

“The Bank remains neutral with respect to the next change to the policy rate: its timing and direction will depend on how new information influences the outlook and assessment of risks,” the release states.

Inflation, which has long been a factor in maintaining the rate, has improved according to the bank’s forecasts.

“Inflation is close to the 2 per cent target and is evolving as the Bank anticipated in its July Monetary Policy Report (MPR),” the release states. “Recent data reinforce the Bank’s view that the earlier pickup in inflation was attributable to the temporary effects of higher energy prices, exchange rate pass-through, and other sector-specific factors rather than to any change in domestic economic fundamentals.”
  • Angela Wong-Liao - Invis Inc on 2014-09-03 11:55:13 AM

    We have an all time low interest rate at this time, however, rate comes down must go up eventually, just depending when?

  • rhéau séguin on 2014-09-03 12:57:07 PM

    well at the rate the pensions funds are making interest on there purchases of mortgages
    papers, this will not be enough to pay them pensions in 10-15 years from now that is WY the Québec government will have new laws that the workers will have to chip in, trust company use to pay 5% interest on pensions funds today they pay a maximum of 2% to 2.25% somebody as to pay the difference, so that is wy the bank of Canada will have to increase is prime rate, soon or later.

  • John Van Driel on 2014-09-03 2:50:51 PM

    The American Fed and Government would have you believe everything is going along swimmingly. Here's a couple of staggering statistics that they don't emphasize:

    Today, the number of people in the US working partime (not because they want to, but because they cannot find full-time work) is UP 76% over January 2007. In 2014, the average length of an unemployment claim is TWICE what it was in January 2007. 32 vs. 16 weeks!

    Recovery is a Long Way off, and if you read what's happening to the economies in Europe, and what's going on politically and otherwise in much of the rest of the world, things could get a lot worse before they get better.

    Usually, I am an optimist, but right now, I'm struggling with my optimism.

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