Bank of Canada interest rate up a quarter of a per cent


Every six weeks, the Bank of Canada decides what its interest rate will be, based upon the nation’s economic indicators. It tends to cut its rate when it wants to stimulate the economy and raise it when it wants to keep a lid on inflation.

On July 11 the bank raised it’s rate for the fourth time since last summer, up another .25 percentage points. RBC, TD and BMO have raised their prime rates accordingly, with the balance of the financial institutes expected to follow this week.

In a press release the bank observed that the housing market is stabilizing, energy commodities, such as oil is reviving, and commerce is increasing – all good signs for the Canadian economy.

But the bank will continue to move cautiously suggesting a measured hike every two quarters, all the while keeping an eye on tariff disputes, specifically those on Canadian steel and aluminum.  But the bank doesn't believe the impact will be too harsh. According to a Central Bank spokesperson, “[the] NAFTA resolution and/or receding trade threats would certainly lay the ground work for an additional hike this year, but we won't hold our breath."

– with files

Posted on:
Thursday, July 12, 2018