Bank of Canada holds key interest rate at 0.5%

The Bank of Canada (BOC) announced Wednesday that it’s holding its key interest rate at 0.5 percent.

Central bank governor Stephen Poloz said in a statement that the benchmark interest rate would remain unchanged. The BOC said that it will take a wait-and-see approach and find out what the federal government will do to stimulate the economy in the upcoming budget.

Therefore, the benchmark target for the overnight rate will stay at 0.5 percent. As for the nation’s economic outlook, the BOC notes that the near-term outlook remains the same as it was in January.

“An assessment of the impact of the upcoming federal budget’s fiscal measures will be incorporated into the Bank’s April projection. All things considered, the risks to the profile for inflation are roughly balanced. Meanwhile, financial vulnerabilities continue to edge higher, in part due to regional shifts in activity associated with the structural adjustment underway in Canada’s economy. The Bank’s Governing Council judges that the overall balance of risks remains within the zone for which the current stance of monetary policy is appropriate, and the target for the overnight rate remains at 1/2 per cent.”

 

Prime Minister Justin Trudeau pledged to present $10 billion budget deficits to stimulate the economy during the election campaign. However, it was discovered that the prime minister’s first-year budget deficit would actually be around $30 billion. A TD Bank report also warned that the Liberal government could add as much as $150 billion to the national debt in his first-term mandate, which is nearly as much as his predecessor’s entire tenure in office.

Oh well…as long as there are enough funds to take selfies.