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.