Bank of Canada holds interest rates steady at 0.5%

The Bank of Canada is holding interest rates steady, maintaining its key, trendsetting rate at 0.5 per cent, it said Wednesday.

The majority of economists expected the central bank to leave any movement to its key rate on hold as the bank monitors the impact of low oil prices on the Canadian economy as well as the effects of two previous cuts made earlier this year.

“Rates stayed on hold as expected, with the BoC seeing the economy as evolving in line with their last forecast,” Avery Shenfeld, chief economist at CIBC, said.

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The bank has twice cut its key rate this year, once in January and again in July, to help counter the economic drag from a sharp decline in the price of crude, the country’s biggest export.

MORE: Latest coverage — plunging oil

The Bank of Canada’s overnight rate establishes the short-term borrowing rates charged by private lenders, affecting interest payments on products like variable rate mortgages and loans.