The Ghanaian News May 2018
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Bank of Canada holds key interest rate at 1.25 per cent OTTAWA -- The Bank of Canada kept its key interest rate target on hold Wednesday, but hinted that rate hikes could be coming as it noted the Canadian economy was a little stronger than expected in the first quarter.
the Bank of Canada said in a statement.
The central bank held its target for the overnight rate -- a key financial benchmark that influences the prime lending rates at the country’s big banks -- steady at 1.25 per cent.
“Housing resale activity has remained soft into the second quarter, as the housing market continues to adjust to new mortgage guidelines and higher borrowing rates. Going forward, solid labour income growth supports the expectation that housing activity will pick up and consumption will continue to contribute importantly to growth in 2018.”
“Exports of goods were more robust than forecast and data on imports of machinery and equipment suggest continued recovery in investment,”
The central bank also said global economic activity remains broadly on track, but added that ongoing uncertainty about trade policies
is dampening global business investment and stresses are developing in some emerging market economies. It noted that recent developments have reinforced its view that higher rates will be warranted to keep inflation near its target, but added that it will take a gradual approach and be guided by the economic data. “In particular, the bank will continue to assess the economy’s sensitivity to interest rate movements and the evolution of economic capacity,” it said.
Economists had predicted the Bank of Canada would keep its key rate on hold Wednesday, but many have suggested the rate may be headed higher later this year. T h e c e n t r a l b a n k ’s decision to keep its trendsetting rate on hold came as inflation sits above the two per cent midpoint of its target range of one to three per cent and core inflation has crept past the two per cent mark for the first time since 2012. It noted that inflation will likely be a bit higher in the near term than was forecast in its April monetary policy report
due to recent increases in gasoline prices, but that it will look through the transitory impact of the fluctuations at the pump. The central bank has raised its key rate three times since last summer, increases that have prompted the big Canadian banks to raise their prime rates which
are used to set the rates charged for variablerate mortgages and other variable-rate loans. Its next scheduled interest rate decision is set for July 11 when it will also update its outlook for the economy and inflation in its monetary policy report. The Canadian Press
The tarnished golden years By Laurie Campbell and Kelley Keehn June marks Seniors’ Month in Canada, a time to celebrate the seniors in our lives and in our
communities. It’s also a fitting time to probe the financial security of aging Canadians. A recent survey of 1000 Canadians over the age of 60 shows that “running out of money before they die” and “not being able to pay for long term care” top the list of financial worries of seniors. The Seniors and Money Report paints a picture of aging Canadians facing financial jeopardy. One-in-four seniors fear they will run out of money before they die, while an equal amount fear they will not be able to pay for long-term care. Other concerns include never being able to pay off their debt, not having enough money to retire, having to sell their house or depending on their children for financial support. One-in-five Canadians still work past age 60 (one-in-16 work past 80). Too much debt, not enough savings, still supporting adult children and “I’ll never afford retirement” are the main reasons. On a positive note, nearly one third of Canadians over 60 continue working because they simply “love their job”. More than half of Canadians age 60 and older carry at least one form of debt, with a many carrying more. The usual culprits here tend to be credit cards (which lead the way), lines of credit, mortgages, and (to a lesser extent) auto loans. Surprisingly, more than one-in-three Canadians 80 and older are carrying at least one form of debt, cont’d on pg. 10