Bank of Canada Rate Announcement March 2024

Date Posted: March 6, 2024

The Rate Increase

In a recent announcement, the Bank of Canada maintained the overnight rate at 5%, announcing no change to the current rate. The bank is also maintaining its policy of quantitative tightening.

The Bank's Governing Council decided to maintain the policy rate and continue normalizing the Bank's balance sheet. They are concerned about the persistence of inflationary pressures and want to see sustained easing in core inflation. They are also monitoring the balance between supply and demand in the economy, inflation expectations, wage growth, and corporate pricing behavior. The Bank is committed to ensuring price stability for Canadians.

What Does This Affect?

The Bank of Canada’s target overnight policy rate affects the interest you pay from lenders like banks. The higher the overnight rate, the more interest you’ll pay. The Bank of Canada maintaining the policy rate means that mortgage payments would stay the same as they were.

Getting Back on Track

Inflation in Canada eased to 2.9% in January, mainly due to lower goods prices. However, shelter prices remain high, contributing the most to inflation. Core inflation, which excludes volatile items, is still around 3% to 3.5%. The Bank expects inflation to stay close to 3% in the first half of the year before gradually decreasing.

If you have questions about your own mortgage, and the best strategy for you, please contact your broker today.

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BoC Announcement