Central bank stands pat with 1% rate

CBC News

Posted: Jan 17, 2012 9:15 AM ET

The Bank of Canada held its target for the overnight interest rate steady at 1.0 per cent on Tuesday, the 11th consecutive time it has chosen to do so.

“With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada,” the bank said in a statement accompanying the decision.

The bank lifted its benchmark rate to its current level in September 2010.

The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or “overnight”) funds among themselves. The bank sets a target level for that rate.

Changes to the target influence other rates, such as consumer loans, mortgages and the value of the Canadian dollar.

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The Coastal Mortgages’ Team