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Bank of Canada Holds Rates Steady

Bank-of-Canada The Bank of Canada left our country’s key lending rate at 0.25%, as expected.  (Chart)

22 of 22 economists surveyed by Bloomberg predicted no change, as did 11 of 11 primary securities dealers surveyed by Reuters.

In its statement today, the BoC said it “reiterates [its] conditional commitment to hold [its] current policy rate until the end of the second quarter of 2010.”  Some economists don’t buy it, however. Scotia, for example, expects rate hikes by Q1 2010. Scotia is looking for a 1.75% increase in the overnight rate by Q4 2010.

The BoC also noted that “In recent weeks, financial conditions and commodity prices have improved significantly, and consumer and business confidence have recovered modestly.”  On the other hand, it admitted that Canada’s “outlook is subject to considerable uncertainty.”

Overall, today’s BoC announcement is a non-event for Canadian mortgage rates in the near term.  Its next interest rate announcement is July 21.