Interest Rate in Canada

Canada - Interest Rate
Bank of Canada hikes rates by 25 basis points in January
On 25 January, the Bank of Canada (BoC) raised its target for the overnight rate from 4.25% to 4.50%, and announced it was continuing to reduce the stock of outstanding government bonds.
The rate hike was justified by excess demand and inflation which is still over double the upper bound of the Bank’s 1.0–3.0% target range. However, headline and core inflation have declined notably from their mid-year peaks. Together with the Bank’s belief that inflation would “come down significantly” in 2023, this underpinned the decision to raise rates by a smaller amount; at the previous two meetings, the BoC hiked by 50 basis points.
In its press release, the Bank stated that it would leave rates at their current level going forward, but was prepared to hike further if needed. This is in line with our panelists, who see rates unchanged in the coming months before some mild monetary easing in late 2023.
The BoC’s next policy announcement will be on 8 March.
On the outlook, Desjardins’ Randall Bartlett said:
“We anticipate the Bank of Canada to remain on hold for the foreseeable future. In fact […] we expect developments in the Canadian economy to be weaker than the Bank currently does. This suggests to us that the next move by the Bank of Canada is likely to be a cut as inflation falls through the year on the back of a recession starting in the first half of 2023.”
Canada - Interest Rate Data
2015 | 2016 | 2017 | 2018 | 2019 | |
---|---|---|---|---|---|
Policy Interest Rate (%) | 0.50 | 0.50 | 1.00 | 1.75 | 1.75 |
Canada Interest Rate Chart

Source: Bank of Canada.
Canada Facts
Value | Change | Date | |
---|---|---|---|
Bond Yield | 1.70 | 1.00 % | Dec 31 |
Exchange Rate | 1.30 | 0.15 % | Jan 01 |
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Economic News
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Canada: Bank of Canada hikes rates by 25 basis points in January
January 25, 2023
On 25 January, the Bank of Canada (BoC) raised its target for the overnight rate from 4.25% to 4.50%, and announced it was continuing to reduce the stock of outstanding government bonds. The rate hike was justified by excess demand and inflation which is still over double the upper bound of the Bank’s 1.0–3.0% target range.
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Canada: Inflation declines to lowest level since February in December
January 17, 2023
Inflation dropped to 6.3% in December from November’s 6.8%, slightly below market expectations.
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Canada: Manufacturing PMI eases in December
January 1, 2023
The S&P Global Manufacturing Purchasing Managers' Index (PMI) fell to 49.2 in December from November's 49.6.
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Canada: Economic activity increases in October; flash estimate suggests further growth in November
December 23, 2022
GDP increased 0.1% in month-on-month seasonally-adjusted terms in October, which followed September's 0.2% increase.
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Canada: House prices drop again in November
December 18, 2022
According to the Teranet-National Bank Composite House Price Index, house prices fell 1.3% month on month in November, following October’s 0.8% decrease.