CIBC expects another rate cut in March despite weak loonie

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A forecast from CIBC World Markets predicts that the bank of Canada will make a further 0.25 per cent cut to interest rates in March despite the current weakness of the Canadian dollar. Chief economist Avery Shenfield says that growth will be lower than 2 per cent this year and sees the loonie falling to 77 cents US and not recovering too much above 80 cents US. Avery notes that there is a need to shift economic growth from housing and debt to exports in spite of the weak oil prices and also that the US is likely to increase its interest rates in the summer, putting additional pressure on the Canadian dollar. There is also a possibility that the BoC will take even more action later in the year: “While that second cut is priced in, markets may then guess about a third" Avery says but with CIBC expecting a recovering oil price by the end of the year it is also forecasting a “reversal of the Bank of Canada’s rate cuts in 2016.”

  • @kiltedbroker on 2015-01-30 8:56:18 AM

    Because economists have such a great track record of nailing predictions... I'm not gonna hold my breath.

  • Name (required) on 2015-01-30 2:56:09 PM

    In my humble opinion, Canada is in recession for past 12 months. Only lies from CREA our banking and most importantly government institutions holds it together. This country is where only few can really make decent money. The rest of the cattle can be fed with paper values and pie in the sky. Simply, representation of who we are and quality of education our people poses. Just like that gentleman who came from abroad, speaks no English, signed exclusivity RE agreement with the agent of the same origin and then went public on CBC to demonstrate the fool he is. Is the 63% over valued real estate based on the same logic? Oh, god!

  • Layth Matthews on 2015-02-04 12:24:18 PM

    What good is more BOC stimulus if the banks don't pass it through to the economy?

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