The target for the overnight rate
The Bank carries out monetary policy by influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate.
The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or "overnight") funds among themselves; the Bank sets a target level for that rate. This target for the overnight rate is often referred to as the Bank's key interest rate or key policy rate.
Changes in the target for the overnight rate influence other interest rates, such as those for consumer loans and mortgages. They can also affect the exchange rate of the Canadian dollar.
In November 2000, the Bank introduced a system of eight "fixed" dates each year on which it announces whether or not it will change the key policy rate (see Schedule, at right.)
Target for the overnight rate, recent data
| Date |
Target (%) |
Change (%) |
|
21 October 2008 |
2.25 |
- 0.25 |
|
8 October 2008 |
2.50 |
- 0.50 |
|
15 July 2008 |
3.00 |
-- |
|
10 june 2008 |
3.00 |
-- |
|
22 April 2008 |
3.00 |
- 0.50 |
| 4 March 2008 |
3.50 |
- 0.50 |
| 22 January 2008 |
4.00 |
- 0.25 |
| 4 December 2007 |
4.25 |
- 0.25 |
|
16 October 2007 |
4.50 |
-- |
| 5 September 2007 |
4.50 |
--- |
| 10 July 2007 |
4.50 |
+ 0.25 |
| 29 May 2007 |
4.25 |
--- |
| 24 April 2007 |
4.25 |
--- |
| 6 March 2007 |
4.25 |
--- |
| 16 January 2007 |
4.25 |
--- |
| 5 December 2006 |
4.25 |
--- |
| 17 October 2006 |
4.25 |
--- |
| 6 September 2006 |
4.25 |
--- |
| 11 July 2006 |
4.25 |
--- |
|
|
