Low Interest Rate Is Expected to Continue Throughout 2013
Bank of Canada, Canada’s central bank, keeps its overnight policy rate unchanged at 1 percent. This rate is in place for the last two and a half years – making borrowing and spending attractive for consumers.
A slacking economy and low inflation influenced Canada’s central bank not to tinker with interest rates at this point. Although there were slight expectations that a high level of household debt might cause the central bank to edge up interest rate, this did not seem to affect any policy making decisions, at least this time.
Data points out that Canada’s economy grew by only 0.6 percent in the fourth quarter at a very slow pace. Bank of Canada expects Canada’s economy to pick up its pace throughout 2013 and beyond. As things look at this moment, it is widely expected that interest rates will stay low at 1 percent for the remainder of 2013. However, Bank of Canada hinted a future rate increase, which could come as early as mid-2014.
For those who have consumer loans, you will have some extra time to catch up on paying off loans. For those who have a mortgage or investment loan, more months on saving money from lower interest payments could help to save some money.
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