The Bank of Canada makes its rate decision on Wednesday, May 30th, at 14:00. There is a broad consensus that the BOC will leave the interest rate unchanged at 1.25%. As there is no planned press conference this time, the focus is solely on the accompanying statement.
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April BoC meeting review
The BOC left the interest rate unchanged at 1.25% as most economists had expected. Markets priced in a 20% chance of a hike. The USD/CAD jumped to a high of 1.2635 as the statement pledged caution regarding raising the interest rates. This was not new but perhaps some had expected a more hawkish tone. In addition, the Canadian Dollar advanced nicely in recent weeks thanks to NAFTA progress and 3-year highs for oil. Perhaps this was an opportunity to take profits.
At yesterday’s BoC meeting, interest rates were unchanged and the BoC kept its cautious and pragmatic stance, points out Sam Bonney, Research Analyst
After today’s meeting, the Canadian central bank left interest rate unchanged. According to National Bank of Canada’s analysts, the Bank of Canada pointed toward rate hikes in the future but the timing is uncertain.
March BoC meeting review
The Bank of Canada left the interest rate unchanged at 1.25% as widely expected. They do see a path of higher interest rates in the future, leaving the hawkish bias in the last paragraph. Rates are still expected to rise. However, the team led by Poloz elevated their tone about international trade. Without directly mentioning Trump, they said that trade developments are a significant and growing source of uncertainty. This is new language that initially sent the USD/CAD higher but limited the gains.
The Bank of Canada maintained its target for the overnight rate at 1 1/4 per cent at the March 2018 policy meeting. The Bank Rate is correspondingly 1 1/2 per cent and the deposit rate is 1 per cent.
The Canadian Dollar keeps the negative bias vs. the buck on Wednesday, taking USD/CAD to the 1.2935/40 band in the wake of the BoC’s meeting.
What is the BOC?
The Bank of Canada is the nation's central bank. Its principal role is "to promote the economic and financial welfare of Canada," as defined in the Bank of Canada Act. The Bank’s four main areas of responsibility are:
- Monetary policy: The Bank influences the supply of money circulating in the economy, using its monetary policy framework to keep inflation low and stable.
- Financial system: The Bank promotes safe, sound and efficient financial systems, within Canada and internationally, and conducts transactions in financial markets in support of these objectives.
- Currency: The Bank designs, issues and distributes Canada’s bank notes.
- Funds management: The Bank is the "fiscal agent" for the Government of Canada, managing its public debt programs and foreign exchange reserves.
Who is BOC's president?
Stephen S. Poloz was born in Oshawa, Ontario, in 1956. He was appointed Governor of the Bank of Canada, effective 3 June 2013, for a term of seven years. He is the ninth Governor of the Bank of Canada. As Governor, he is also Chairman of the Board of Directors of the Bank and a member of the Board of Directors of the Bank for International Settlements (BIS). He currently chairs both the BIS Audit Committee and the Consultative Council for the Americas.
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the world interest rates table
The World Interest Rates Table reflects the current interest rates of the main countries around the world, set by their respective Central Banks. Rates typically reflect the health of individual economies, as in a perfect scenario, Central Banks tend to rise rates when the economy is growing and therefore instigate inflation.