Despite the surprise 0.75% rate drop last week, Canadian Finance Minister Joe Oliver said he has no plans to influence the country's banks to follow the Bank of Canada (BOC).
“I do not intend to interfere with the day-to-day operations of the banks," Oliver said. "I have no current plans to introduce new rules regarding residential mortgages."
TD Bank on Thursday maintained its rates and announced that it won’t match BOC’s new rate. The Royal Bank of Canada also did not budge.
"Our decision not to change our prime rate at this time was carefully considered and is based on a number of factors, with the Bank of Canada's overnight rate only being one of them," spokesman Mohammed Nakhooda said.
"I, like the others, were completely caught off guard," Royal Bank chief executive David McKay said. "I need to catch up with my team and digest what's going on in the market and figure out what we're going to do from here."
The last time Canada's biggest banks cut their prime rate was in April 2009, from 2.5% to 2.25%.
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