Bank of Canada decided to keep its main interest rate unchanged yet again on Tuesday, a decision that was widely anticipated by economists. The rate remains at 1%, unchanged since September of 2010. This article from the Financial Post shares the highlights of Tuesday's announcement.
Taking into account the current global economic state, The Bank of Canada kept the wording of the announcement similar to that of the previous release in June, stating, "to the extent that the economic expansion continues and the current excess supply in the economy is gradually absorbed, some modest withdrawal of the present considerable monetary policy stimulus may become appropriate." This is surprising to some, as the economic outlook caused many to believe the Bank of Canada would possibly lower rates or give a longer time line for borrowing costs to rise.
The Bank of Canada also revised predictions for Canada's economic growth, stating results for 2012 to lower to 2.1% and 2013 at 2.3%, a departure from the previous forecast of 2.4% for both years. It was acknowledged that while the global economy is straining Canada's economic activity, "domestic factors are expected to support moderate growth." Bank of Canada Governor Mark Carney touched on a slowdown in the housing market, but did not mention new mortgage lending regulations. Carney will expand on the Bank of Canada's outlook for Canada's economy on Wednesday when the quarterly monetary policy report is released.
For more information on how these factors affect you, contact a Canadian mortgage broker.
Click here for the full article from the Financial Post.