Don't expect a change in Canada's interest rate anytime soon. The Bank of Canada recently announced they're holding the rate steady at 1.75 percent.
Access Credit Union's President and CEO Larry Davey explains the recent slowdown of the global economy and trade tension between the U.S and China also kept the bank from raising its key rate in December after raising the rate in October last year.
"This pause could likely be here for a while," he says. However, he predicts rates could increase closer to July.
Since 2017, the lending rate has risen from 0.5 percent to 1.75 percent in five separate hikes.
The Bank of Canada actively works to combat the effects of inflation using interest rates to reduce or encourage how much money Canadians borrow. A rate increase of 1.00 percent could make the difference of more than $200 in monthly mortgage payments (on a $500,000 mortgage amortized over 25 years.)
"As things get better and better in the economy they look to just keep it at around a certain level, by raising rates they can slow it down a bit," Davey explains. "And then if the economy slows too much you start to see rates drop off to spark a jump in the economy."