5 December 2018

In case the trend continues, the influence on the national economy could lead to another change in monetary policy.

The Alberta government decided to cut the production levels for supporting the prices, and the Bank pointed to it today.

The next rate meeting will be in 2019 already, and according to overnight index swaps, there’s a one in two chance of a rate increase. Nevertheless, Bank of Montreal economist Benjamin Reitzes believes it’s not a sure thing yet.

Toronto-Dominion Bank analyst Brian DePratto agrees, saying it could take some time now.

“Now, we don’t expect a rate hike in January”, – he noted. “A more possible variant is spring, so that the BoC could ensure that the growth is back on the path.”

In addition to it, currency investors also lower their predictions of more increases in the nearest future. Loonie went down by more than half a cent after the Bank’s announcement, falling below the 75 cent US level and marking its lowest level since May 2017.

In case nothing changes, a rate hike could push the national currency up, as thus assets denominated in Canadian currency would be more valuable.