Plain meaning
The Bank of Canada's key short-term interest-rate target used to implement monetary policy.
Also called
target for the overnight rate
policy interest rate
policy rate
Key points
- The overnight-rate target influences many other interest rates in the economy.
- Rate changes can affect variable-rate mortgages, lines of credit, business loans, deposits, and bond markets.
- The rate is not the same as every consumer or business borrowing rate, but it is a key reference point.
- Bank of Canada announcements usually explain why the rate was changed or held steady.
Why it comes up
Readers often need this background to understand why Bank of Canada articles matter for housing, debt costs, savings, and business conditions.