Bank of Canada Overnight Rate

What is the boc overnight rate?

The Bank of Canada overnight rate, technically called the "target for the overnight rate," is the interest rate at which the Bank of Canada wants major financial institutions to lend each other money for one day at a time. It's the central bank's primary tool for managing inflation and economic growth.

BoC announces its decision on the overnight rate eight times a year on pre-scheduled dates. At each announcement, the rate is held steady, raised, or cut — usually in increments of 25 basis points (0.25%), occasionally 50 or 75 basis points in unusual conditions. The decision is made by the Bank's six-member Governing Council based on inflation outlook, employment, GDP, and external risks.

Although consumers don't borrow at the overnight rate directly, almost every other Canadian interest rate is anchored to it. Bank prime rates move with it. Variable mortgages and HELOCs follow prime. Even fixed mortgage rates, which are technically driven by 5-year Government of Canada bond yields, correlate strongly with where the BoC is steering policy.

Recent observations

Each row below represents a Bank of Canada rate decision. The Governing Council meets eight times a year on pre-announced dates; rates change only at these meetings (with rare emergency exceptions during crisis periods).