BoC AGAIN RAISES ITS KEY RATE, LOONIE LEAPS TO HIGHEST LEVEL IN 2 YEARS
Sep 06, 2017
By Bob Komsic
Stronger than expected recent economic data has led the Bank of Canada to hike its key interest rate to 1% – its second .25% increase since July which was the first in seven years.
The central bank’s rate, known as its overnight rate, is now back to where it was at the beginning of 2015 when the Bank of Canada began cutting rates to stimulate the economy which had been hit by falling oil prices.
Finance Minister Bill Morneau says the bank’s responding to a positive set of economic indicators.
The dollar gained over one penny in response to the move, briefly trading at 82-cents U.S., a level not seen since June 2015.
Despite the positive outlook, the bank points out geopolitical risks and other uncertainties could affect growth in the second half of the year.
That has some economists warning if the economy were to cool down, as they suspect it will, that the Bank of Canada will have to take a slower approach.