On 9/8/2010, The Bank of Canada (BoC) announced it is raising its overnight interest rate by 0.25% to 1%. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent. The next scheduled date for announcing the overnight rate target is October 19, 2010.
Although almost all retail bank economists, the media, analysts, and many politicians, have voiced their view against the central bank rate increase, it is encouraging that governor Mark Carney and company have decided to act rationally & logically. They acted according to what they felt is the best for the country based on their own research/knowledge of the current economic situation, and general monetary policy & economics. They resisted the institutional imperative!
Although it has been fired up by the media, we should not expect to feel any significant impact or drastic economic condition changes resulting from this specific rate hike of 0.25%.
Bank of Canada:
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