Bank of Canada Holds Interest Rate Steady

The Bank of Canada kept its benchmark interest rate at 1.75 per cent on Wednesday.

Economists who monitor the bank weren't expecting any change to the rate, which the central bank meets to decide on every six weeks.

The bank tends to cut its rate when it wants to stimulate the economy, and hikes it when it wants to slow down an overheated one.

"Growth during the first half of 2019 is now expected to be slower than was anticipated in January," which is why the bank is keeping its rate low, to help stimulate the economy, it said.

In January, the bank was expecting Canada's economy to grow by 1.7 per cent this year. On Wednesday, it downgraded that lukewarm forecast to a chillier 1.2 per cent.

Economists think that's a recipe for lower rates, which is why "an accommodative policy interest rate continues to be warranted," the bank said.

The central bank's rate impacts Canadians by influencing the rates that retail banks give to savers and borrowers on products like mortgages and savings accounts.

"Anyone with a variable rate mortgage should be pleased with this announcement because it diminishes the timing and likelihood of any increase to the prime rate," said James Laird, co-founder of Ratehub Inc. and president of mortgage brokerage CanWise Financial.

"This announcement also provides some pressure relief to those considering entering the housing market, as they should expect fixed rates to remain stable through the spring and summer homebuying season."

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