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The BoC Leaves Rates As-is

Bank-of-Canada-Benchmark-RateThe Bank of Canada left the country’s key lending rate unchanged today. That keeps prime rate at 3.00% for now.

It was no surprise since every notable economist expected no action.

The Bank had this to say about Canada’s economic situation:

  • Global economic “risks have increased”
  • “…pressures affecting prices remain largely unchanged”
  • Today’s decision “leaves considerable monetary stimulus in place”
  • “In the third quarter, household spending was stronger than the Bank had anticipated and growth in business investment was robust.”
  • “…net exports were weaker than projected and continued to exert a significant drag on growth”

The BoC hiked rates three times this year, which lifted variable mortgage rates by 0.75 percentage points. The market expects the Bank to resume rate increases in mid-2011.

The next interest rate meeting is six weeks from today on January 18, 2011.