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Bills Canadians pay regularly

Weal Global recovery

There are many reasons for rain or snow. Similarly Bank of Canada had many reasons to keep the low rate low.

Overnight target rate is controlled and monitored by the Bank of Canada. It is a trend setter rate. Many other borrowing costs like banks prime rate and business lending rates are pegged or benchmarked against this rate.

The main reasons for the bank – not to take any action – are;

  • Feeble consumer demand.
  • Fragile Global economy.
  • Weak GDP.
  • Tame Inflation.
  • Anemic Canadian economy.
  • Strong Consumer debt level.
  • Solid personal borrowing.

So, the central bank did not want to encourage personal borrowing neither it wanted to hurt businesses. Therefore it decided that the middle is the path of the wise.