Canadian Personal Finance Blog

Archive for July 10th, 2007

So after a morning of reflection we have a clearer picture of the whole in terms of the Bank of Canada’s overnight lending rate (which is now at 4.5%). As a direct quote from the statement here:

In line with this outlook, the Bank is raising the target for the overnight rate to 4 1/2 per cent. Some modest further increase in the overnight rate may be required to bring inflation back to the target over the medium term.

A “modest” increase is always an interesting description, so further increases are coming but they may not be a lot, would be a good guess for now. The next scheduled review of interest rates is scheduled for September the 5th, right after Labor Day, so we shall see then whether we are in for another hike then, or whether it will be a “wait and see” tactic adopted by the bank.

For those of us who have forgotten how LOW rates have gone, here is a helpful graph that I created from the Bank of Canada’s data for the past 10 years. It is based on the monthly rate, not the overnight rate, but still you get the feel for how LOW rates have been for the past 10 years.

After sitting on the Bank of Canada web site awaiting the word, I finally have the definitive statement from the Central Bank (it’s almost as exciting as watching the NFL draft). The technology did not work as I would have hoped, given it was supposed to give me IMMEDIATE feedback when the announcement came out, however that never happened and it just timed out, which suggests a lot of people were sitting watching this announcement.

So the announcement should be at this link, however, right now all it is is a title that states overnight rates are up to 4.5% (up a quarter point), and that is about it, kind of empty? I love technology.

There you have it all rates will now shuffle to reflect this, and I don’t have a statement yet about whether this is a one time increase or whether we will see more rate hikes coming up? Stay tuned!