The BoC Rate Statement is the Fixed Announcement Date press release that sets the overnight rate target between financial institutions. The target is Canada's policy interest rate for 1-day loans, set by the Bank of Canada through its Governing Council. It operates under inflation targeting near 2% within a 1% to 3% range, with no survey or sample. It does not set prime, mortgage, deposit or savings rates directly but moves them through transmission, and the public never uses this market.
The Bank publishes 8 decisions each year, as a rule on Wednesdays at 09:45 Eastern Time, with any change taking effect the next day. A blackout starts 8 days before in January, April, July and October and 7 days before otherwise, ending at 10:30 Eastern Time. Each release brings a statement naming the next date, plus the Monetary Policy Report and a press conference in January, April, July and October. The Summary of Deliberations follows two weeks later, and decisions are never revised.
Each decision rests on drivers the statement names: inflation, demand, labour, expectations, global forces and funding terms.
On 13 July 2022 the Bank raised the target 100 basis points to 2.5%, with Bank Rate at 2.75% and deposit rate at 2.5%. Inflation sat near 8%, over half the CPI basket rose above 5%, and core moves spanned 3.9% to 5.4%. The economy ran in clear excess demand with tight labour and risks of higher-for-longer expectations.
The Bank saw inflation near 3% by the end of next year and back at 2% by the end of 2024. Growth was set at 3.5% in 2022, 1.75% in 2023 and 2.5% in 2024. Rates would need to rise further at a pace guided by economic and inflation review, while QT continued. The statement set the next date at 7 September 2022 and the next full outlook at 26 October 2022.
Key point: Many think the Bank sets loan and deposit rates directly, but it sets only the overnight target and banks pass it on.
No historical data available
