Bank of Canada maintains overnight rate target at 1 per cent

Not unexpectedly, the Bank of Canada kept its target for the overnight rate steady at 1.0 per cent on Tuesday, citing a worsening global economy for the need to maintain the current level of stimulus.

Suprisingly however,  the bank hinted it may have to keep its benchmark interest rate that low for an extended period, good news if you’re in a prime minus mortgage already.

Recent increases in the inflation rate created some worries of a rate increase.  This increase is being viewed as temporary by the bank, stating that “core inflation is expected to be slightly softer than previously expected, declining through 2012 before returning to 2 percent by the end of 2013”.

The Prime rate that most variable rate mortgages are based on remains at 3.0%