The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent for the fifth straight time. Noting that “the low level of oil prices will continue to dampen growth in Canada and other energy-producing countries,” although “Canada’s GDP growth in the fourth quarter was not as weak as expected.”
According to Bank Of Canada, global growth is expected to strengthen this year and next, and U.S. expansion remains broadly on track. Inflation in Canada is also evolving as anticipated. Taking into account all of these considerations, the Bank “judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate.”
A lower Bank of Canada rate affects variable rate mortgages and lines of credit. Holders of fixed-rate mortgages, however, won’t be affected by this rate drop.