Bank of Canada keeps benchmark interest rate steady at 1%

By Pete Evans, CBC News Posted: Dec 06, 2017 10:10 AM ET Last Updated: Dec 06, 2017 5:16 PM ET

Hikes in July, September are still working their way through the economy

The Bank of Canada has decided to keep its benchmark lending rate steady at one per cent, pausing after two small hikes earlier this year.

Canada’s central bank said Wednesday it has decided to keep its target for the overnight rate right where it is, while rate hikes in July and in September continue to work their way through the economy.

“While higher interest rates will likely be required over time,” the bank said, “the current stance of monetary policy remains appropriate.”

The bank noted that economic data has been coming in within range of what it was forecasting as recently as October, when the bank was expecting moderate growth for the rest of this year after a strong start to 2017.

Exports are a bit lower than expected, but the job market is a bit better than expected, the bank said.

The central bank’s rate is what banks charge each other for small overnight loans. It filters into the overall economy by influencing the rate that consumers get for their variable rate savings accounts and loans such as mortgages.

Eight times a year, the bank’s board of governors meets to decide where to set the bank’s rate.

The next rate decision is scheduled for Jan. 1


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