Bank of Canada stands pat, keeps benchmark interest rate at 1.25% - GistBuz

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Wednesday, March 7, 2018

Bank of Canada stands pat, keeps benchmark interest rate at 1.25%

The Bank of Canada did what was expected of it on Wednesday, opting not to change its benchmark interest rate from its current level of 1.25 per cent.

But in a statement, it seemed to hint at concerns over growing trade protectionism in justifying its decision to not raise rates again this time around.

"Trade policy developments are an important and growing source of uncertainty for the global and Canadian outlooks," the bank said.

The bank also noted disappointing GDP numbers and signs of unease in the housing market as reasons to stay on the sidelines for now.

"The bank continues to monitor the economy's sensitivity to higher interest rates," the central bank said.

Eight times a year, the central bank meets to discuss its benchmark interest rate, known as the target for the overnight rate, which is the rate that banks charge each other for overnight loans.

The central bank's rate filters down into the economy because it tends to have an impact on rates that borrowers and savers get from retail banks on things like mortgages and savings accounts.

The bank's next meeting is scheduled for April 18.



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