On March 10, the Bank of Canada (BoC) announced that it will hold its current level of policy rate until inflation objective is sustainably achieved. The overnight rate remains the same at the effective lower bound of 0.25%. The Bank Rate stays at 0.5% and the deposit rate at 0.25%.
While the outlook for the near future looks positive, there are hurdles to a smooth recovery. The following are two main concerns:
Considering these factors and the long-term outlook, the Governing Council thinks recovery will still need extraordinary monetary policy support.
To keep interest rates low until economic slack is absorbed, so the 2% inflation target is met, the BoC will continue its quantitative program. The program continues to hold its pace of $4 billion a week. The bank has stated that it will continue to provide monetary policy stimulus to support economic recovery and achieve the inflation objective. According to the January projection, the inflation target will not be achieved till 2023.
Ontarians can take advantage of the low interest rates whether it is to buy a home, purchase an investment property or refinance and use the equity on their home to expand their business, invest or consolidate debt.
If you are interested in refinancing, you can start by applying for a free home valuation report.
GreenFlow Financial is an award-winning mortgage brokerage firm based in Toronto and Ottawa.
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