Prospective homebuyers were reassured today that interest rates will remain near historic lows “for a long time,” according to Bank of Canada Governor Tiff Macklem.
The BoC chief made the comments during a conference call following the Bank’s interest rate meeting, where it left the overnight lending rate unchanged at 0.25%, at its “effective lower bound.”
“Interest rates are very low and they are going to be there for a long time,” Macklem said. “Canadians and Canadian businesses are facing an unusual amount of uncertainty, so we have been unusually clear about the future path for interest rates.”
In the Governing Council’s official statement, it said it would “hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved.”
Observers say that implies the Bank has no plans to start raising rates until at least 2023.
“Based on the Bank’s new forecasts, this implies it has no intention of raising policy rates for several years,” wrote Capital Economics economist Stephen Brown.