By Romana King – March 9, 2016
Why you should care about whether or not the Bank of Canada holds rates steady
Via/ http://www.moneysense.ca/
The Bank of Canada announced today that it will hold its target rate at 0.5%. In the announcement, the BoC justified the hold on rates by stating: “The global economy is progressing largely as…anticipated…Financial market volatility, reflecting heightened concerns about economic momentum, appears to be abating. Although downside risks remain, the Bank still expects global growth to strengthen this year and next.”
The Bank did reference that while US economic growth will continue, the low level of oil prices we are currently experiencing will more than likely continue this year and this will dampen growth in Canada and other energy-producing countries.
Eight times a year, the Bank of Canada sets its key interest rate. This is a fancy way of saying it establishes an overnight target interest which is then used by banks to set the prime rate. This prime rate establishes how much it will cost to borrow, whether it’s a mortgage, a car loan or any other type of loan or debt.
To read the full article, including 8 answers to questions regarding BOC rates click here
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