The Bank of Canada recently announced that it is keeping its target overnight lending rate at 0.5 per cent.
The Bank acknowledged in its most recent economic forecast that the risk of inflation has fallen since July, signifying lower interest rates in the near future. However, the Bank also expressed concern about rising mortgage debt, placing doubt on the idea that it might lower interest rates for fear of causing more household debt.
This means that the Bank’s key policy interest rate has not changed and will likely stay low for at least one year, and perhaps even later.
As of September 7, 2016, the advertised five-year lending rate sat at 4.74 per cent, which is unchanged from the Bank’s previous announcement on July 13th and an increase of 0.1 per cent compared to one year ago.
The next announcement on interest rates will take place on October 19, 2016, and will be accompanied by its Monetary Policy Report which will update the Bank economic forecast.