March 1 2011 – Bank of Canada holds rate steady

Date: Tuesday, March 1st, 2011

The Bank of Canada kept its benchmark lending rate unchanged at one per cent in its latest policy decision on Tuesday.

Since raising its overnight lending rate to one per cent in September, the bank has held steady for four consecutive policy decisions.

But while the bank kept the rate steady, its statement took a cautious tone with regards to future rate hikes. “Any further reduction in monetary policy stimulus would need to be carefully considered,” the bank said.

That’s a slight change from some previous statements.

In recent months, Bank of Canada governor Mark Carney has repeatedly warned Canadians to get their financial houses in order, noting that interest rates will rise at some point.

“While consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes,” the statement read.

But the persistent strength in the Canadian dollar and Canada’s poor relative productivity performance remain a concern, the bank said.

The Canadian dollar was slightly lower, as investors had anticipated the move. The loonie was 0.16 of a cent US higher to 103.1 cents before the news, and fell to 102.8 in the moments following.

The bank’s next policy decision is due April 13.

Lawrence Kobescak

Lawrence Kobescak

Lawrence Kobescak, the creator behind OntarioMortgageSuperstore.com is a real estate sales representative, mortgage agent and real estate investor. OntarioMortgageSuperstore.com has reached over 240,000 Canadians since 2009. Lawrence has been quoted in the Globe & Mail and MortgageBrokerNews.ca.

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