Major banks raise prime lending rate to 6.7% after Bank of Canada raises interest rates – National
Canada’s six largest banks rose basic loan interest rate after the eighth consecutive increase to Bank of Canada standard interest rate.
The central bank’s target for the overnight rate is currently at 4.5% following a quarter point increase on Wednesday.
The central bank’s policy rate sets the borrowing rate for other lending institutions, which takes into account the terms for Canadian consumer loans such as mortgages.
Following Wednesday’s decision, TD Bank, Scotiabank, BMO, RBC, CIBC and National Bank all raised their prime lending rates by 25 basis points to 6.7%.
This marks the highest level for the prime lending rate in Canada since 2001, according to data from RateSpy.com.
Believing that inflation will “reduce significantly,” the Bank of Canada signaled Wednesday that it is ready to pause after 425 basis points of its policy rate hike.
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