On Wednesday, March 6, the Bank of Canada announced that it will hold its key interest rate steady at 1.75 percent. The corresponding prime rate at all five of Canada’s big banks is currently sitting at 3.95 percent.
At an event hosted by the Hamilton Chamber of Commerce on Thursday, March 7 at the Sheraton Hotel in Hamilton, Lynne Patterson, Deputy Governor of the Bank of Canada, provided additional reasoning on the key interest rate hold.
Recent data suggest that the slowdown in the global economy has been more pronounced and widespread than the Bank had forecast in its January Monetary Policy Report.
As a result, Canada will see a weaker first half than was projected by the bank in January. In particular, the following factors were more unsteady than expected:
- Exports and business investment within the energy sector
- Consumer spending
- The housing market
The central bank is projecting total CPI inflation to remain slightly under their target of 2 per cent throughout the entirety of 2019.
To view Lynne Patterson’s full speech from the Hamilton Chamber of Commerce event, please click the below button: