Pamela Vasiliu
Sales Representative
pvasiliu@remax.net

RE/MAX Professionals Inc.
Brokerage
Independently owned and operated.

Date: Tuesday November the 21st, 2017 
416-236-1241

 

   

Bank Of Canada Maintains Interest Rates

January 20, 2016 - Updated: January 20, 2016

The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1/2 per cent. The Bank Rate is correspondingly 3/4 per cent and the deposit rate is 1/4 per cent.

 

Governor Stephen Poloz and his central bank colleagues opted Wednesday not to cut the bank’s overnight rate, now set at 0.5 per cent, in what analysts had predicted would be a very close call.

 

The bank insisted Canada’s wrenching pivot from a resource-driven economy to one powered by other activities is “under way” and that the job market remains “resilient” outside the resource sector.

By not cutting rates, Mr. Poloz may also want to avoid triggering an even sharper dive in the Canadian dollar – one of the world’s weakest currencies in recent months. Lower Canadian interest rates typically depress the currency as investors seek better returns elsewhere, including the U.S., where the Federal Reserve has begun to hike its own rates.

Most analysts say a rate cut later this year remains a possibility. CIBC World Markets economist Nick Exarhos said Mr. Poloz appears “willing to wait and see what the Finance Minister [Bill Morneau] provides as a bolster to the economy before pulling the trigger on any more monetary easing.

The decision to not cut now suggests the central bank was worried about knocking the dollar down further and causing already debt-laded Canadians to borrow more, Bank of Montreal chief economist Douglas Porter said.

The cheaper dollar has also caused angst among many Canadians who now face sharply higher prices for groceries and other imported goods, as well as winter getaways to the U.S. Even exporters, who stand to benefit most from a low dollar, had warned that a further drop would not be helpful.

The dollar fell below the psychological threshold of 70 cents (U.S.) this week, dragged lower by thet.dropping price of oil and anticipation of a possible Bank of Canada rate cut.

 

What does this mean for Real Estate? Predictions are that Toronto and the GTA will be in for another record year in sales. If inventory levels remain low and rates maintain, the market will continue to move.
 

Will our shrinking dollar effect the real Estate Market? We shall soon see - investing in Cananda's largest cities may prove beneficial for foreign investors

 


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