The Bank of Canada left its benchmark interest rate unchanged at 1.75 percent of December 5th 2018, after hiking 25 bps on the previous meeting, as widely expected. It remained the highest rate since December 2008. Policymakers said more interest rate hikes will be need to keep inflation into a neutral range of 2 percent target and that will depend on factors, which include consumption and housing, global trade policy developments, oil price shock, the evolution of business investment, and the Bank’s assessment of the economy’s capacity. The Bank Rate and deposit rate were also left unchanged at 2.0 percent and 1.50 percent, respectively. Interest Rate in Canada averaged 5.89 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.

Interest Rate in Canada is expected to be 1.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Canada to stand at 2.50 in 12 months time. In the long-term, the Canada Interest Rate is projected to trend around 2.75 percent in 2020, according to our econometric models.

Canada Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
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% 1.5% 1.5%
2018-10-24 02:00 PM BoC Interest Rate Decision 1.75% 1.5% 1.75% 1.75%
2018-12-05 03:00 PM BoC Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-01-09 03:00 PM BoC Interest Rate Decision 1.75%



Canada Leaves Monetary Policy Unchanged



The Bank of Canada left its benchmark interest rate unchanged at 1.75 percent of December 5th 2018, after hiking 25 bps on the previous meeting, as widely expected. It remained the highest rate since December 2008. Policymakers said more interest rate hikes will be need to keep inflation into a neutral range of 2 percent target and that will depend on factors, which include consumption and housing, global trade policy developments, oil price shock, the evolution of business investment, and the Bank’s assessment of the economy’s capacity. The Bank Rate and deposit rate were also left unchanged at 2.0 percent and 1.50 percent, respectively.

Statement by the Bank of Canada:

The global economic expansion is moderating largely as expected, but signs are emerging that trade conflicts are weighing more heavily on global demand. Recent encouraging developments at the G20 meetings are a reminder that there are upside as well as downside risks around trade policy. Growth in major advanced economies has slowed, although activity in the United States remains above potential. 

Oil prices have fallen sharply since the October Monetary Policy Report (MPR), reflecting a combination of geopolitical developments, uncertainty about global growth prospects, and expansion of U.S. shale oil production. Benchmarks for western Canadian oil – both heavy and, more recently, light – have been pulled down even further by transportation constraints and a buildup of inventories. In light of these developments and associated cutbacks in production, activity in Canada’s energy sector will likely be materially weaker than expected.

The Canadian economy as a whole grew in line with the Bank’s projection in the third quarter, although data suggest less momentum going into the fourth quarter. Business investment fell in the third quarter, in large part due to heightened trade uncertainty during the summer. Business investment outside the energy sector is expected to strengthen with the signing of the USMCA, new federal government tax measures, and ongoing capacity constraints. Along with strong foreign demand, this increase in productive capacity should support continued growth in exports.

Household credit and regional housing markets appear to be stabilizing following a significant slowdown in recent quarters. The Bank continues to monitor the impact on both builders and buyers of tighter mortgage rules, regional housing policy changes, and higher interest rates.

Inflation has been evolving as expected and the Bank’s core measures are all tracking 2 per cent, consistent with an economy that has been operating close to its capacity. CPI inflation, at 2.4 per cent in October, is just above target but is expected to ease in coming months by more than the Bank had previously forecast, due to lower gasoline prices. Downward historical revisions by Statistics Canada to GDP, together with recent macroeconomic developments, indicate there may be additional room for non-inflationary growth. The Bank will reassess all of these factors in its new projection for the January MPR.

Weighing all of these developments, Governing Council continues to judge that the policy interest rate will need to rise into a neutral range to achieve the inflation target. The appropriate pace of rate increases will depend on a number of factors. These include the effect of higher interest rates on consumption and housing, and global trade policy developments. The persistence of the oil price shock, the evolution of business investment, and the Bank’s assessment of the economy’s capacity will also factor importantly into our decisions about the future stance of monetary policy. 


BoC | Stefanie Moya | stefanie.moya@tradingeconomics.com
12/5/2018 3:03:56 PM



Canada Money Last Previous Highest Lowest Unit
Interest Rate 1.75 1.75 16.00 0.25 percent [+]
Interbank Rate 2.27 2.26 8.95 0.43 percent [+]
Money Supply M0 93471.00 94210.00 94210.00 2214.00 CAD Million [+]
Money Supply M1 993758.00 992223.00 993758.00 30706.00 CAD Million [+]
Money Supply M2 1642469.00 1632627.00 1642469.00 25523.00 CAD Million [+]
Money Supply M3 2381545.00 2366746.00 2381545.00 37982.00 CAD Million [+]
Banks Balance Sheet 5721872.00 5652859.00 5721872.00 10516.00 CAD Million [+]
Central Bank Balance Sheet 115823.00 114911.00 115921.00 2110.00 CAD Million [+]
Foreign Exchange Reserves 82008.00 82088.00 86805.00 1678.00 USD Million [+]
Loans to Private Sector 422246.00 414713.00 422246.00 10904.00 CAD Million [+]
Deposit Interest Rate 0.10 0.10 15.96 0.05 percent [+]
Foreign Stock Investment 7695.00 2632.00 38935.00 -24129.00 CAD Million [+]
Private Debt to GDP 266.61 264.66 266.61 175.61 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 December of 2018.

Actual Previous Highest Lowest Dates Unit Frequency
1.75 1.75 16.00 0.25 1990 - 2018 percent Daily




Country Last Previous
Argentina 58.97 Dec/18
Turkey 24.00 Nov/18
Mexico 8.00 Nov/18
Russia 7.50 Nov/18
South Africa 6.75 Nov/18
Brazil 6.50 Nov/18
India 6.50 Dec/18
Indonesia 6.00 Nov/18
China 4.35 Nov/18
Saudi Arabia 2.75 Nov/18
United States 2.25 Nov/18
Singapore 1.97 Nov/18
Canada 1.75 Dec/18
South Korea 1.75 Nov/18
Australia 1.50 Dec/18
United Kingdom 0.75 Nov/18
Euro Area 0.00 Nov/18
France 0.00 Nov/18
Germany 0.00 Nov/18
Italy 0.00 Nov/18
Netherlands 0.00 Nov/18
Spain 0.00 Nov/18
Japan -0.10 Nov/18
Switzerland -0.75 Nov/18


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