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The Bank of Canada (BOC) interest rate held for the 10th time in a row on January 22, 2020.
The rate stayed at 1.75%, the same it has been since October of 2018. The Bank Rate is correspondingly 2% and the deposit rate is 1.5%.
Here’s what the BOC had to say about the decision:
“The global economy is showing signs of stabilization, and some recent trade developments have been positive,” the BOC stated. “However, there remains a high degree of uncertainty and geopolitical tensions have re-emerged, with tragic consequences. The Canadian economy has been resilient but indicators since the October Monetary Policy Report (MPR) have been mixed.”
Factors involved in the January decision include:
How the Canadian Real Estate Market Factors In
While some components of the January decision were due to slowdowns, the residential market saw the opposite.
The BOC called residential investment “robust” through most of 2019, moderating to a “still-solid” pace in Q4.
They also indicated that during the past year, Canadians have been saving a larger share of their incomes, which could dampen consumer spending but also help alleviate financial vulnerabilities.
Moving forward, the BOC predicts a pickup in household spending, supported by population and income growth, as well as the federal income tax cut.
2020 Interest Rate Forecast
In the January 22, 2020 report, the BOC pointed to what might come in 2020 for the Canadian economy.
In determining future interest rates, the BOC will be watching the recent slowdown and paying particular attention to consumer spending, business investment, and the Canadian housing market.
The next BOC interest rate announcement is scheduled for March 4, 2020.
See the full January 2020 BOC release here: https://www.bankofcanada.ca/2020/01/fad-press-release-2020-01-22/
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