Canada Interest Rate  1990-2018 | Data | Chart | Calendar | Forecast

The Bank of Canada hiked its key overnight rate by 25bps to 1.5 percent on July 11th 2018, in line with market expectations. It is the second rate increase so far this year, as inflation is expected to edge up further to about 2.5 percent before settling back to the 2 percent target by the second half of 2019. The Bank Rate is correspondingly 1.75 percent and the deposit rate is 1.25 percent. Interest Rate in Canada averaged 5.90 percent from 1990 until 2018, reaching an all time high of 16 percent in February of 1991 and a record low of 0.25 percent in April of 2009.

Canada Interest Rate
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Canada Raises Interest Rate to 1.5%

The Bank of Canada hiked its key overnight rate by 25bps to 1.5%, the highest since 2008. It is the second increase this year as uptick in inflation and strong economic data outweighed intensifying tariff war with the US.

Statement by the Bank of Canada:

The Bank expects the global economy to grow by about 3 ¾ per cent in 2018 and 3 ½ per cent in 2019, in line with the April Monetary Policy Report (MPR). The US economy is proving stronger than expected, reinforcing market expectations of higher policy rates and pushing up the US dollar. This is contributing to financial stresses in some emerging market economies. Meanwhile, oil prices have risen. Yet, the Canadian dollar is lower, reflecting broad-based US dollar strength and concerns about trade actions. The possibility of more trade protectionism is the most important threat to global prospects.

Canada’s economy continues to operate close to its capacity and the composition of growth is shifting. Temporary factors are causing volatility in quarterly growth rates: the Bank projects a pick-up to 2.8 per cent in the second quarter and a moderation to 1.5 per cent in the third. Household spending is being dampened by higher interest rates and tighter mortgage lending guidelines. Recent data suggest housing markets are beginning to stabilize following a weak start to 2018. Meanwhile, exports are being buoyed by strong global demand and higher commodity prices. Business investment is growing in response to solid demand growth and capacity pressures, although trade tensions are weighing on investment in some sectors. Overall, the Bank still expects average growth of close to 2 per cent over 2018-2020.

CPI and the Bank’s core measures of inflation remain near 2 per cent, consistent with an economy operating close to capacity. CPI inflation is expected to edge up further to about 2.5 per cent before settling back to 2 per cent by the second half of 2019. The Bank estimates that underlying wage growth is running at about 2.3 per cent, slower than would be expected in a labour market with no slack.

As in April, the projection incorporates an estimate of the impact of trade uncertainty on Canadian investment and exports. This effect is now judged to be larger, given mounting trade tensions.

The July projection also incorporates the estimated impact of tariffs on steel and aluminum recently imposed by the United States, as well as the countermeasures enacted by Canada. Although there will be difficult adjustments for some industries and their workers, the effect of these measures on Canadian growth and inflation is expected to be modest.

Governing Council expects that higher interest rates will be warranted to keep inflation near target and will continue to take a gradual approach, guided by incoming data. In particular, the Bank is monitoring the economy’s adjustment to higher interest rates and the evolution of capacity and wage pressures, as well as the response of companies and consumers to trade actions.

BoC | Joana Taborda |
7/11/2018 2:59:22 PM

Calendar GMT Actual Previous Consensus TEForecast
2018-04-18 02:00 PM BoC Interest Rate Decision 1.25% 1.25% 1.25% 1.25%
2018-05-30 02:00 PM BoC Interest Rate Decision 1.25% 1.25% 1.25% 1.25%
2018-07-11 02:00 PM BoC Interest Rate Decision 1.5% 1.25% 1.5% 1.5%
2018-09-05 02:00 PM BoC Interest Rate Decision 1.5% 1.5%
2018-10-24 02:00 PM BoC Interest Rate Decision
2018-10-24 02:00 PM BoC Monetary Policy Report

Canada Money Last Previous Highest Lowest Unit
Interest Rate 1.50 1.25 16.00 0.25 percent [+]
Interbank Rate 1.95 1.95 8.95 0.43 percent [+]
Money Supply M0 90890.00 90538.00 90890.00 2214.00 CAD Million [+]
Money Supply M1 981699.00 975476.00 981699.00 30706.00 CAD Million [+]
Money Supply M2 1607547.00 1597414.00 1607547.00 25523.00 CAD Million [+]
Money Supply M3 2329151.00 2317123.00 2377425.00 37982.00 CAD Million [+]
Banks Balance Sheet 5603434.00 5473083.00 5603434.00 10516.00 CAD Million [+]
Central Bank Balance Sheet 111556.00 110853.00 111556.00 2226.00 CAD Million [+]
Foreign Exchange Reserves 81817.00 81765.00 86805.00 1678.00 USD Million [+]
Loans to Private Sector 401763.00 400366.00 401763.00 10904.00 CAD Million [+]
Deposit Interest Rate 0.10 0.10 15.96 0.05 percent [+]
Foreign Stock Investment 2180.00 9090.00 38783.00 -24129.00 CAD Million [+]
Private Debt to GDP 267.03 264.66 267.03 175.61 percent [+]

Canada Interest Rate

In Canada, benchmark interest rate is set by the Bank of Canada's (BoC) Governing Council. The official interest rate is the Overnight Rate. Since 1996 the Bank Rate is set at the upper limit of an operating band for the money market overnight rate. Previously, from March 1980 until February 1996 the Bank Rate was set at 25 basis points above the weekly average tender rate for 3-month Treasury bills. This page provides - Canada Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Canada Interest Rate - actual data, historical chart and calendar of releases - was last updated on August of 2018.

Actual Previous Highest Lowest Dates Unit Frequency
1.50 1.25 16.00 0.25 1990 - 2018 percent Daily

interest rate by Country
Country Last
Turkey 17.75 Jul/18
Mexico 7.75 Aug/18
Russia 7.25 Jul/18
Brazil 6.50 Aug/18
India 6.50 Aug/18
Indonesia 5.50 Aug/18
China 4.35 Jul/18
United States 2.00 Aug/18
Australia 1.50 Aug/18
Canada 1.50 Jul/18
South Korea 1.50 Jul/18
United Kingdom 0.75 Aug/18
Euro Area 0.00 Jul/18
France 0.00 Jul/18
Germany 0.00 Jul/18
Italy 0.00 Jul/18
Netherlands 0.00 Jul/18
Spain 0.00 Jul/18
Japan -0.10 Jul/18
Switzerland -0.75 Jul/18