Bank of Canada

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Monetary Policy
- The framework
- Inflation
- Key interest rate: target for the overnight rate
  - A History of the key interest rate
- Statistics
- Monetary Policy Report
- Decision-making process
- Blackout guidelines
- How monetary policy works
- Why Monetary Policy Matters: A Canadian Perspective
- Large Value Transfer System
- FAQ

Tools:

Monetary Policy

Key interest rate: target for the overnight rate

The target for the overnight rate

The Bank carries out monetary policy by influencing short-term interest rates. It does this by raising and lowering the target for the overnight rate.

The overnight rate is the interest rate at which major financial institutions borrow and lend one-day (or "overnight") funds among themselves; the Bank sets a target level for that rate. This target for the overnight rate is often referred to as the Bank's key interest rate or key policy rate.

Changes in the target for the overnight rate influence other interest rates, such as those for consumer loans and mortgages. They can also affect the exchange rate of the Canadian dollar.

In November 2000, the Bank introduced a system of eight "fixed" dates each year on which it announces whether or not it will change the key policy rate (see Schedule, at right.)

More information: fact sheet

Target for the overnight rate, recent data

Date	Target (%)	Change (%)
16 October 2007	4.50	---
5 September 2007	4.50	---
10 July 2007	4.50	+ 0.25
29 May 2007	4.25	---
24 April 2007	4.25	---
6 March 2007	4.25	---
16 January 2007	4.25	---
5 December 2006	4.25	---
17 October 2006	4.25	---
6 September 2006	4.25	---
11 July 2006	4.25	---
More data

Implementation of Fixed Announcement Dates:

Information paper:
A new system of fixed dates for announcing changes to the Bank Rate (2000)

Consultation results:
Summary of consultation results