The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.
“Not only are the headwinds of the global financial crisis still blowing, but now we’re also dealing with lower prices for oil and other key commodities, which previously were a key growth engine for us. The implications for income and investment, and the adjustments they’re causing across sectors and regions, may take years to work themselves out.”
~ Stephen Poloz
After maintaining the overnight rate for 3 consecutive announcements, the Bank of Canada has decided today to lower the overnight rate by .25%. This will not have an immediate impact on mortgage rates, we will have to wait and see how the banks respond (if they respond) and if they move the prime rate in response to this announcement.
Back on January 21st 2015, when the Bank of Canada also dropped the overnight rate by .25%, the banks made the decision to only drop the prime rate by .15% instead of following suit with the full .25%. Once the banks make their announcement regarding prime rate (what impacts variable rate holders), you can be sure I will include that here on my blog.
The next scheduled Bank of Canada date for announcing the overnight rate target is September 9th, 2015.
Here is the official press release from the Bank of Canada for your reference.
Also, the Bank of Canada released its Monetary Policy Report, I have included it for your reference as well.