Rate Announcement March 8, 2023

For the first time in a year, the Bank of Canada has left its overnight target rate unchanged. The overnight target rate remains at 4.5%, keeping the prime lending rate at 6.7%.

This decision was deemed necessary according to the bank’s governing council, who felt that the current domestic economic outlook remains uncertain. In addition, there were global risks and trade conflicts impacting Canada’s economy. The bank also mentioned that the Canadian economy is operating closely to its productive well.

“Global growth continues to slow, and inflation, while still too high, is coming down due primarily to lower energy prices. Inflation eased to 5.9% in January, reflecting lower price increases for energy, durable goods and some services. Price increases for food and shelter remain high, causing continued hardship for Canadians. The Bank remains resolute in its commitment to restoring price stability for Canadians,” the Bank of Canada explained in its press release this morning.

The Bank of Canada also mentioned that it is keeping a close eye on the economy’s developments and trends to understand future rate movements. It is prepared to increase the policy rate further if needed to return inflation to the 2% target.

While there was really no uncertainty about the rate pause, the question on mortgage borrowers’ minds now is whether the Bank of Canada will remain on hold and the direction of any future rate moves it will make.

Do you have questions about what this means for your variable rate mortgage? Reach out anytime, I’m always happy to chat!


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