On October 23rd, the Bank of Canada announced the they were keeping their key policy rate at one per cent, the same level it has been for the last two years. This is the longest time since the 1950s that the rate has stayed the same.
According to the Canadian Real Estate Association, “much of the Bank’s latest guidance about factors influencing its decision about where interest rates are headed next (up, down or stable) was a repeat of messages contained in previous announcements this year. However, something new appeared this time around when the bank indicated it was concerned about how low interest rates were enticing households to take on more debt, and that it would bear ‘evolution of imbalances in the household sector’ in mind as to when it will raise interest rates.”
Canada is expected to have a brighter economic outlook but there are still risks like Europe’s recession and slowing growth in China that could affect the outcome.
The Bank’s advertised five-year lending rate on October 23rd was 5.24 per cent, and the next rate announcement is scheduled for December 4th.
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