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Bank of Canada Holds Overnight Rate at 1.5 Percent, Hikes to Follow

BoC's latest press release announced it would be maintaining its target overnight rate at 1.5%, after an increase in July from 1.25%. 

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The next announcement for BoC’s overnight rate target is scheduled on October 24, 2018.

In August, Canada’s rate of inflation rose above 3% for the first time since 2011. High energy prices and airfare contributed to these amped up figures.

“Recent data reinforce Governing Council’s assessment that higher interest rates will be warranted to achieve the inflation target. We will continue to take a gradual approach, guided by incoming data. In particular, the Bank continues to gauge the economy’s reaction to higher interest rates.” (BoC Report)

Canada’s strong economy is also evidenced by its rise in GDP (from 1.4 per cent to 2.9 per cent in the first and second quarters of 2018). It is expected to cool slightly in the third quarter of 2018. as export prices are lowered.

The long-term impact on borrowers will become more clear on October 24th, after the BoC’s next rate announcement.

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This article, Bank of Canada Holds Overnight Rate at 1.5 Percent, Hikes to Follow, appeared first on Shupilov News.

 

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