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Bank of Canada holds rate steady at 0.25% even as it expects economy to shrink until March

Boc Rate Jon Nichols C21 Real Estate Lacombe

Central bank expects economy to grow by 4 per cent this year, almost 5 per cent in 2022.

The Bank of Canada elected to keep its benchmark interest rate steady at 0.25 per cent on Wednesday, reiterating its pledge to keep it there "until the recovery is well underway."

Eight times a year, Canada's central bank meets to set its benchmark interest rate, known as the target for the overnight rate, which impacts the rates that Canadians get on things like mortgages and savings accounts at banks.

All things being equal, the bank slashes its rate when it wants to stimulate borrowing and investing and raises it when it wants to cool things down.

The bank slashed its rate a number of times starting in March of last year, as the COVID-19 pandemic was just starting.

There had been some speculation prior to Wednesday that the bank may decide to cut again from its current level of 0.25 per cent, as virus numbers have been moving higher for several weeks now.

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Jon Nichols

Jon Nichols
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