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Bank of Canada maintains key interest rate at 0.25%
Matthew Robinson • January 20, 2021
The Bank of Canada today kept its target for the overnight rate at 0.25%.
The Bank of Canada today kept its target for the overnight rate at 0.25%. With the spread of the virus and reinstatement of lockdown measures, the Bank is anticipating an economic decline in the first quarter of 2021. The Bank is optimistic for a strong economic recovery assuming an effective vaccine roll out in Canada and around the world.
The Bank made no mention of a “micro cut” reduction to the key overnight rate in the months ahead. The Bank’s monetary policy remains unchanged from their previous announcements, therefore we should expect the quantitative easing program to remain in place and the key overnight rate to hold until 2023.
Anyone with a variable rate mortgage or home equity line of credit (HELOC) should be pleased that their prime will remain unchanged, although they would have been ecstatic had the Bank implemented a “micro cut.”
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