BoC: Nominal neutral interest rate dropped to 2.5%-3.5% range - ANZ

Analysts at ANZ note that the BoC dropped its nominal neutral interest rate to a range of 2.5% to 3.5% (from 4.5 to 5.5%).

Key Quotes

“Being a small open economy, it views the Canadian neutral rate as a function of the global neutral rate, plus a country specific risk premium. For the global neutral rate it believes it has declined and is likely to remain low over the long-term.”