Bank of Canada lending rate

Photo: James Paolo/Flickr

Though the Bank of Canada lowered the overnight lending rate from 1 per cent to 0.75 per cent in January, it did not make any further cuts in their March announcement.

There was speculation in early February that the central bank could lower the rate yet again, but opinion shifted by the end of the month and economists from leading banks were openly doubting another cut.

The decision to maintain the rate was tied to inflation risks becoming “more balanced” in the eyes of the bank.

“Financial conditions in Canada have eased materially since January, in response to the Bank’s recent monetary policy action and to global financial developments,” said the Bank of Canada in a press release.

“This easing is reflected across the yield curve and in a wide range of asset prices, including the Canadian dollar. These conditions will mitigate the negative effects of the oil price shock, further boosting growth through stronger non-energy exports and investment.”

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