The Bank of Canada is holding its trend-setting interest rate at 0.75 per cent, as expected, as it continues to monitor the effects of lower oil prices on the Canadian economy.
“Recent indicators suggest consumption in Canada is holding up relatively well, given the impact of lower oil prices on gross domestic income,” the bank said in a statement.
The central bank’s key lending rate influences interest levels charged by by private lenders, like the country’s big five banks. Experts had expected the so-called overnight rate to remain at 0.75 per cent as the bank evaluates the fallout from lower global oil prices, a plunge that’s taking a toll on Canada’s biggest export.
In January, the bank made the surprise decision to cut its key rate by a quarter of a percentage point amid the sharp slide in oil. Crude prices have firmed up in recent months, while employment levels and economic growth have held up as well as expected.
Comments