The Bank of Canada held its benchmark interest rate at 1.75 percent on July 10th 2019, as widely expected. It remained the highest rate since December 2008. Policymakers said that the degree of monetary policy accommodation is appropriate and that they will continue to monitor developments in the energy sector and the impact of trade conflicts on the prospects for Canadian growth and inflation. The Bank Rate and deposit rate were also left steady at 2.0 percent and 1.50 percent, respectively. Interest Rate in Canada averaged 5.88 percent from 1990 until 2019, reaching an all time high of 16 percent in February of 1991 and a record low of 0.25 percent in April of 2009.

Interest Rate in Canada is expected to be 1.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Canada to stand at 1.50 in 12 months time. In the long-term, the Canada Interest Rate is projected to trend around 1.75 percent in 2020, according to our econometric models.

Canada Interest Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-03-06 03:00 PM BoC Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-04-24 02:00 PM BoC Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-05-29 02:00 PM BoC Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-07-10 02:00 PM BoC Interest Rate Decision 1.75% 1.75% 1.75% 1.75%
2019-09-04 02:00 PM BoC Interest Rate Decision 1.75%
2019-10-22 02:30 PM BoC Business Outlook Survey
2019-10-30 02:00 PM BoC Monetary Policy Report



Canada Holds Interest Rate at 1.75%

The Bank of Canada held its benchmark interest rate at 1.75 percent on July 10th 2019, as widely expected. It remained the highest rate since December 2008. Policymakers said that the degree of monetary policy accommodation is appropriate and noted that the economy outlook is clouded by ongoing global trade tensions. The Committee added that they will continue to monitor developments in the energy sector and the impact of trade conflicts on the prospects for domestic economic growth and inflation. The Bank Rate and deposit rate were also left unchanged at 2.0 percent and 1.50 percent, respectively.

Statement by the Bank of Canada:

Evidence has been accumulating that ongoing trade tensions are having a material effect on the global economic outlook. The Bank had already incorporated such negative effects in previous Monetary Policy Reports (MPR) and in this forecast has made further adjustments in light of weaker sentiment and activity in major economies. Trade conflicts between the United States and China, in particular, are curbing manufacturing activity and business investment and pushing down commodity prices.

Policy is responding to the slowdown: central banks in the US and Europe have signalled their readiness to provide more accommodative monetary policy and further policy stimulus has been implemented in China. In this context, global financial conditions have eased substantially. The Bank now expects global GDP to grow by 3 percent in 2019 and to strengthen to around 3 ¼ percent in 2020 and 2021, with the US slowing to a pace near its potential. Escalation of trade conflicts remains the biggest downside risk to the global and Canadian outlooks.

Following temporary weakness in late 2018 and early 2019, Canada’s economy is returning to growth around potential, as expected. Growth in the second quarter appears to be stronger than predicted due to some temporary factors, including the reversal of weather-related slowdowns in the first quarter and a surge in oil production. Consumption is being supported by a healthy labour market. At the national level, the housing market is stabilizing, although there are still significant adjustments underway in some regions. A material decline in longer-term mortgage rates is supporting housing activity. Exports rebounded in the second quarter and will grow moderately as foreign demand continues to expand. However, ongoing trade conflicts and competitiveness challenges are dampening the outlook for trade and investment. The Bank projects real GDP growth to average 1.3 percent in 2019 and about 2 percent in 2020 and 2021.

Inflation remains around the 2 percent target, with some recent upward pressure from higher food and automobile prices. Core measures of inflation are also close to 2 percent. CPI inflation will likely dip this year because of the dynamics of gasoline prices and some other temporary factors. As slack in the economy is absorbed and these temporary effects wane, inflation is expected to return sustainably to 2 percent by mid-2020.

Recent data show the Canadian economy is returning to potential growth. However, the outlook is clouded by persistent trade tensions. Taken together, the degree of accommodation being provided by the current policy interest rate remains appropriate. As Governing Council continues to monitor incoming data, it will pay particular attention to developments in the energy sector and the impact of trade conflicts on the prospects for Canadian growth and inflation.


BoC | Stefanie Moya | stefanie.moya@tradingeconomics.com
7/10/2019 2:05:34 PM



Canada Money Last Previous Highest Lowest Unit
Interest Rate 1.75 1.75 16.00 0.25 percent [+]
Interbank Rate 1.98 1.98 8.95 0.43 percent [+]
Money Supply M0 95302.00 94833.00 95302.00 2214.00 CAD Million [+]
Money Supply M1 1022323.00 1013044.00 1022323.00 30706.00 CAD Million [+]
Money Supply M2 1716564.00 1705170.00 1716564.00 25523.00 CAD Million [+]
Money Supply M3 2499695.00 2492515.00 2499695.00 37982.00 CAD Million [+]
Central Bank Balance Sheet 116937.00 116111.00 116937.00 2110.00 CAD Million [+]
Banks Balance Sheet 6131223.00 5951298.00 6131223.00 10516.00 CAD Million [+]
Foreign Exchange Reserves 86300.00 85704.00 87872.00 1678.00 USD Million [+]
Loans to Private Sector 457592.00 447987.00 457592.00 10904.00 CAD Million [+]
Deposit Interest Rate 1.81 1.81 22.06 0.10 percent [+]
Foreign Stock Investment 10195.00 -12790.00 38935.00 -24129.00 CAD Million [+]
Private Debt to GDP 266.50 266.40 266.50 175.10 percent [+]


Canada Interest Rate

In Canada, benchmark interest rate is set by the Bank of Canada's (BoC) Governing Council. The official interest rate is the Overnight Rate. Since 1996 the Bank Rate is set at the upper limit of an operating band for the money market overnight rate. Previously, from March 1980 until February 1996 the Bank Rate was set at 25 basis points above the weekly average tender rate for 3-month Treasury bills. This page provides - Canada Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. Canada Interest Rate - actual data, historical chart and calendar of releases - was last updated on July of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
1.75 1.75 16.00 0.25 1990 - 2019 percent Daily




Country Last Previous
Argentina 59.01 Jul/19
Turkey 24.00 Jun/19
Mexico 8.25 Jul/19
Russia 7.50 Jun/19
South Africa 6.75 May/19
Brazil 6.50 Jun/19
Indonesia 6.00 Jun/19
India 5.75 Jul/19
China 4.35 May/19
Saudi Arabia 3.00 Jun/19
United States 2.50 Jun/19
Canada 1.75 Jul/19
South Korea 1.75 Jun/19
Singapore 1.67 Jun/19
Australia 1.00 Jul/19
United Kingdom 0.75 Jun/19
Euro Area 0.00 Jun/19
France 0.00 Jun/19
Germany 0.00 Jun/19
Italy 0.00 Jun/19
Netherlands 0.00 Jun/19
Spain 0.00 Jun/19
Japan -0.10 Jun/19
Switzerland -0.75 Jun/19


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