Menu
Log In
Log In
Sign Up
Who We AreCredit MonitoringCredit CardsPersonal LoansMortgagesBankingInsuranceBoostBlog

Bank of Canada Keeps Interest Rate At 1%: What You Need To Know

Rachel Surman Oct 25, 2017

The Bank of Canada (BoC) kept its trendsetting interest rate at 1% on Wednesday, following two straight hikes in July and September. This rate, called the “Overnight Rate,” is what dictates the prime consumer lending rates of Canada’s “Big Five Banks.”

Why did the interest rate stay the same?

While the bank is holding off on increasing the rate, for now, it hinted at possible increases in the future. The bank said in a statement it will look at incoming data to assess the impact of higher interest rates, Canada’s economic capacity, wage growth, and inflation.

“While less monetary stimulus will likely be required over time, [the BoC] will be cautious in making future adjustments to the policy rate,” the bank said. 

The bank cites the substantial unknowns around geopolitical developments, and U.S.- related trade policies, such as the renegotiation of the North American Free Trade Agreement, as reasons for caution.

If you’re wondering how this affects you, we’ve got you covered. 

Lending rates will stay the same, for now

When the BoC raises its interest rate, prime lending rates follow – which currently sit at 3.2%. 

Interest rates on personal loans depend on the individual, but borrowing from banks may become more expensive in the future. Consumer debt is also at an all-time-high – Canadians carry, on average, $22,125 in consumer debt. This is why many consider a Borrowell personal loan attractive: your interest rate won’t change.

A less powerful Canadian dollar

The Canadian dollar slumped to a more than three month low, compared to its American counterpart, when the BoC announced it was keeping its rate at 1%.

The Canadian dollar slipped from 78.95 cents US at 9:55 a.m. to 78:38 cents at 10 a.m. and by midday, the dollar has slipped even further, to 78.11 cents.  

What’s next?

The BoC’s next scheduled announcement is set for Dec. 6, 2017. 

Similar Topics

The Importance of On-Time Payments

You may have heard that making on-time payments is the key to having a good credit score. But just how important is it to make your payments on time? If you’ve made the mistake of missing payments in the past, what can you do to help improve your credit score now?

The Borrowell Team

Jun 12, 2020

Learn More


Products
Credit MonitoringCredit cardsLoansMortgagesBankingInsuranceBoost

Borrowell® is a registered trademark of Borrowell Inc. All Rights Reserved. The Equifax credit score is based on Equifax’s proprietary model and may not be the same score used by third parties to determine your credit profile. The score provided to you for educational use is the Equifax Risk Score.


2014-2020 Borrowell® | The Credit Is All Yours!