The Bank of Canada left its interest rate unchanged at 1.75% on Wednesday, January 9th, as the sharp decline in oil prices temporarily dims its economic outlook for the coming months. “The drop in global oil prices has a material impact on the Canadian outlook, resulting in lower terms of trade and national income,” the bank said in a statement. However, before long, the central bank expects the economy to expand and is projecting 1.7% growth in 2019. It stressed that more rate hikes, will be necessary “over time”.
The bank said, the timing of its next hike will depend on many factors, focus on developments in the oil markets, global trade policy and the Canadian housing sector.
“The decision to leave the interest rate unchanged by the Bank of Canada will give home buyers more time to work out a purchase plan. The statement issued by the bank indicated that while rates will remain today, they are sticking with their plan to increase rates down the road once other economic factors improve. The next rate setting date will happen on March 6, so it would be wise for people considering purchasing a home, or wanting to refinance their existing mortgage, to contact their mortgage specialist and lock in at today’s rate. It is uncertain if rates will go up in March, but people looking to buy can lock in rates today to avoid rate increases down the road.” — Sean Kavanagh
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