The Central Bank of Canada (BoC) decided to raise the overnight base interest rate by 1.0 percentage point, from 1.5% to 2.5% per year, this Wednesday (13) .
The bank rate was raised to 2.75% and the deposit rate to 2.5%.
According to the BC, inflation in Canada is higher and more persistent than expected in its April monetary policy report and is likely to remain around 8% in the coming months.
“While global factors such as the war in Ukraine and ongoing supply disruptions have been the biggest drivers, domestic price pressures due to excess demand are becoming more prominent,” the statement reads.
The BoC also informed that it continues to continue the quantitative tightening (QT) policy, which began in April.
In the statement, the Canadian monetary authority estimates that the Gross Domestic Product (GDP) has grown by around 4% in the second quarter.
“Growth is expected to slow to around 2% in the third quarter, as consumption growth moderates and housing market activity recedes after unsustainable strength during the pandemic,” he points out.
Source: CNN Brasil
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