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Jan 21/15 - Bank of Canada Interest Rate Lowering

Blog by Diane Cardoso | January 21st, 2015

Bank of Canada Interest Rate Decision - January 21, 2015. The Bank of Canada announced that it is lowering its target overnight rate to 0.75 per cent. The surprise loosening of monetary policy is in response to the recent dramatic decline in oil prices and the consequent negative impact on Canadian growth and inflation. The Bank expects the Canadian economy to grow 2.1 per cent in 2015 and 2.4 per cent in 2016. How long the Bank intends to keep its overnight rate at 0.75 per cent is unclear, but given strong underlying growth pre-oil shock, if oil prices rise as expected in the second half of the year we could see this move reversed by the end of 2015. For now, the BC housing market should continue to benefit from low and now likely lower mortgage rates.