July 14, 2022
2 min
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At a Glance: Preparing For a 6% Prime Rate

The prime corporate borrowing rate has averaged around 3.00% for the past 10 years. As the Bank of Canada aggressively tries to taper inflation, rates look to effectively double by year end from the past pre-covid era. Firms must budget for increased interest costs and adapt.

Where are we now?

  • The prime lending rate at 4.70% is now the highest it’s been over the past 10 years
  • The last time prime was above this level was April 2008
  • Since 2004, prime was above 4.75% for a period which lasted 30 months (Oct 2005 to April 2008

Where do we go from here?

  • The swaps market is pointing to an additional 1.25% in rate increases by year end
  • The Bank of Canada is expected to keep rates on hold first quarter of 2023


https://www.bloomberg.com/news/articles/2022-07-13/bank-of-canada-hikes- 100-basis-points-in-bid-to-crush-inflation#xj4y7vzkg?sref=cxtFVrVh




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