BOC expected to hold historic low overnight target rate

The Bank of Canada will make its next target rate announcement on July 15, with most mortgage executives predicting no move in the rate.

“The Bank of Canada’s target for the overnight rate is currently at a historic low of 0.25 per cent. The bank has reiterated in their announcements that they are at their lower bound and will maintain this rate as long as required,” says James Laird, co-founder of Ratehub.ca and president of Canwise Financial mortgage brokerage.

Justin Thouin, co-founder and CEO of Lowestrates. ca agrees, expecting the current rate to have a long shelf life.

“There is virtually no chance the bank can increase its benchmark interest rate in the foreseeable future,” says Thouin.

“I don’t have a crystal ball, but I would be surprised if that rate didn’t rise for at least two years,” he says.

“We are starting to see the large Canadian banks report major losses and raising its key rate would further stress the banking system and that is something the bank wishes to avoid at all costs.”