The Bank of Canada has decided to keep its unfinished benchmark interest rate while it summarizes the impact of its previous policy decisions and the impact of oil prices lower than the economy.
The central bank revealed Wednesday that it will maintain its benchmark interest rate – known as the overnight rate target – at 1.75 per cent. The bank raised its rate to that level in October, the fifth time since the summer of 2017 that it decided to intervene.
The bank rate directly affects the rates that Canadian consumers get from retail banks. When the central bank increases its interest rate, it lends more expensive – but it's good news for savers.
No one of the economists set by Bloomberg was expecting to increase this time, but viewers thought what the bank would say about the price of oil oil.
The price of the Canadian oil crude called West Canada Select has fallen as low as US $ 14 per barrel since last bank lasts, while there were no U.S. combinations. will never fall below $ 50. If prices continue, the impact on the wider economy could be enough to guarantee a change in the financial policy.
The government of Alberta has implemented an emergency cut to production levels to boost prices, and the bank noted the issue in its statement on Wednesday.
"In light of these developments and associated reductions in production, activity in the Canadian energy sector is likely to be weaker than expected," said the bank.
The bank will meet next in the new year to re-assess a rate policy. Trading in investments called overnight index exchanges suggests that there is one chance of two rate mood when that happens.
The Canadian dollar retired more than half the percent when the decision came out, at a level under the US level 75 percent for the first time since June.