Bank of Canada Interest Rate Decision

The Bank of Canada (BoC) interest rate decision is the most important scheduled event for the Canadian dollar. The Bank of Canada announces its interest rate 8 times a year, on dates published at the start of the year and always at a fixed time. But the Canadian dollar doesn't listen to this decision alone: oil prices and Federal Reserve policy also drive a large part of its moves. At the top of this page you can see the current rate, the date of the next meeting, a countdown to the decision and the history of Canada's interest rate since 2000; this guide helps you read the Bank's statement correctly and weigh the market reaction alongside these factors.

What exactly does the Bank of Canada set?

Canada's policy rate is the "target for the overnight rate" (Overnight Rate); the rate at which banks lend to each other overnight, and which influences every other rate in the economy, from mortgages to deposit interest. The Bank of Canada targets 2% inflation, the midpoint of a 1 to 3% range.

One important difference from the Bank of England or the Bank of Japan is that decisions at the Bank of Canada's Governing Council are made by consensus, and individual members' votes are not published. Instead, about two weeks after each decision the Bank publishes a summary of the Council's deliberations, which sometimes moves the market on its own.

Bank of Canada rate decision time in Tehran time

The decision is announced at 9:45 a.m. Ottawa time. Like the US, Canada observes daylight saving time and Iran does not, so this time shifts by one hour in Tehran time over the year:

Event component	Frequency	Tehran time (summer)	Tehran time (winter)
Rate announcement and statement (BOC Rate Statement)	8 times a year	17:15	18:15
Monetary Policy Report	4 times a year, alongside the decision	17:15	18:15

At meetings where the Monetary Policy Report is released, the Governor holds a press conference about 45 minutes later. This time falls in the New York session, when Canadian dollar liquidity is high, but it sometimes coincides with US data released the same day, making it harder to tell which news drove the move.

Oil, the US and inflation: the three factors behind the Bank of Canada's decision

Oil prices

Canada is a major energy exporter and the Canadian dollar is usually counted among the "commodity currencies". A sharp drop in US crude oil both weakens export revenue and economic growth and can push the Bank toward a softer policy. That's why on decision day, the move in oil sometimes amplifies or offsets the effect of the statement.

Gap with the Federal Reserve

The US is Canada's largest trading partner, and the Bank of Canada cannot follow a path very different from the US for long without its currency coming under pressure. For this reason, the market always interprets the Bank of Canada's decision alongside the Federal Reserve interest rate decision .

Domestic inflation and labor market

The Bank's two main inputs are Canadian inflation and the Canadian employment report . In the inflation data, the Bank pays special attention to the Trimmed and Median core measures, because they strip out the volatility of items such as energy. High household debt and the housing market's sensitivity to interest rates are also why the Bank usually moves gradually.

How to read the Bank of Canada statement

• Decision versus expectations: If a rate change already seemed certain, the number itself is not new news; a real surprise happens when the decision differs from what the market expected.
• The closing sentences of the statement: At the end of the statement, the Bank usually says which data its next step depends on. A change of a few words in this section can matter more than the decision itself.
• Monetary Policy Report forecasts: At the four meetings accompanied by this report, the Bank publishes new estimates of growth and inflation, and the market compares them with the previous estimates.

Market reaction and risk management

This decision has the greatest impact on US dollar to Canadian dollar . A more hawkish tone than expected usually strengthens the Canadian dollar, meaning USDCAD falls, and a softer tone does the opposite; but if oil or the US dollar make a big move at the same time, this relationship can break down. Before every decision:

1. Compare the current rate and meeting dates with other banks in central bank interest rates .
2. Check whether any major US data is released on the same day.
3. In the first minutes the spread is wider and there is a risk of slippage ; use the trader's calculator to size your position so that a potential loss doesn't exceed your risk limit.

This page is for information only and is not a recommendation to buy or sell.