Bank of Canada to keep interest rates low longer
The Bank of Canada is giving hints that it is no longer as concerned about households being lured into taking on unsustainable levels of debt and says it’s appropriate to keep the cost of borrowing near historic lows.
The Bank of Canada has decided once again to keep the overnight rate where it has been for the past two and a half years, at a record low of 1%. Although the move didn't come as a surprise, the language in Wednesday's statement was softer than normal, prompting many to believe Canada's central bank is not as concerned about Canadian debt levels as it has been in the past.
In January's statement, Bank of Canada Governor Mark Carney had indicated that "... gradual withdrawal of monetary stimulus ..." would be required in the future. Although the bank has not withdrawn this statement completely, it remains a secondary point at this time. Economic growth is expected to pick up in 2013, and the bank expects household debt to income ratios to continue to stabilize.
For more information on how the Bank of Canada's rate decision affects you, talk to an Ottawa Mortgage Broker.