Bank of Canada holds interest rates steady in April 2016
Graph source: Bank of Canada
The Bank of Canada announced on April 13th, 2016 that it was keeping its trend-setting target overnight lending rate at 0.5 per cent.
In its announcement and accompanying Monetary Policy Report (MPR) that updates its economic forecast, the Bank repeated themes contained in its previous announcements and MPRs published in late 2015 and early 2016.
It still expects the Canadian economy to grow modestly this year and next, with Canadian exports projected to gain strength and offset ongoing cuts to investment in the oil patch. However, it downgraded its outlook for both but expects deficit financed spending announced in the recent Federal Budget will offset additional drag from weaker projected export growth and plunging investment.
With positive though unspectacular and regionally uneven economic growth as far as the eye can see combined with its equivocal assessment of upside and downside risks to its economic outlook, the Bank of Canada is likely to keep interest rates on hold well into 2017.
As of April 13th, 2016, the advertised five-year lending rate stood at 4.64 per cent, unchanged from both the previous Bank rate announcement on March 9th and from one year ago.
The next interest rate announcement will be on May 25th, 2016, while the next update to the Monetary Policy Report will be on July 13th, 2016.
Source: Canadian Real Estate Association
