Bank of Canada maintains overnight rate.
Yet again, the Bank of Canada has opted to keep the target for the overnight rate steady at ½ percent-meaning variable rate mortgages won’t be moving any time soon.
The Bank attributed it’s move (or lack thereof) to weaker-than-expected global economic growth and uncertainty surrounding China’s transition to a slower growth path (which is putting downward pressure on energy prices). The US economy, on the other hand, is continuing to pick up steam-which is good news for Canadian exports.
Canada’s economy has rebounded from the recession we were experiencing earlier this year. Non-resource sectors are benefiting from previous monetary policy actions and depreciation of the Canadian dollar, the Bank says. Households are continuing to spend at a moderate pace. Lower prices for oil and other commodities, however, are dampening business investments and exports in the resource sector.
It’s these lower oil and commodity prices that are causing the Bank to revise its economic growth forecast for 2016 and 2017. Now, the Bank projects real GDP will grow by just 1% in 2015 before firming to about 2% in 2016 and 2.5% in 2017. The Bank is now saying the Canadian economy will return to full capacity by mid-2017.
If you have any questions about your variable rate mortgage-or even your fixed-rate mortgage-please don’t hesitate to reach out to me.