Bank of Canada maintains key rate
The Bank of Canada today announced that it is maintaining its key policy rate. In its statement the Bank said that it expects a weaker international outlook "to dampen GDP growth in Canada through financial, confidence and trade channels. The economy also continues to face competitiveness challenges, including the persistent strength of the Canadian dollar."
The Bank also said that it expects that the inflation rate in Canada will continue to decline owing to "reduced pressures from food and energy prices and ongoing excess supply in the economy."
The prime rate at most lenders will stay at 3.00%, which means those with variable-rate mortgages will still enjoy relatively low rates. A new variable-rate mortgage can in many cases be obtained by qualified borrowers at Prime minus 0.20%, or 2.80%. Home equity lines of credit and variable-rate credit cards are also typically linked to the prime rate. The pricing for new fixed-rate mortgages is influenced by trends in the bond markets, rather than the central bank's key policy rate.
The Bank's next rate announcement is scheduled for January 17, 2012.