February 26, 2024

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Canada raises official interest rate by half a point again, 1.5% |  Economy |  D.W.

Canada raises official interest rate by half a point again, 1.5% | Economy | D.W.

To combat inflation, the Bank of Canada on Wednesday (06.01.2022) raised its guidance rate from 1% to 1.5%, saying it would “rise before it starts to fall in the short term”. The Canadian Central Bank noted that the Russian invasion of Ukraine, the closure of the corona virus in China and the continuing disruption of supply chains were contributing to the high price. Inflation in Canada is at a 30-year high, driven by rising prices of energy, food and housing.

Indicated that the organism would continue with its monetary policy. On April 13, the Canadian Monetary Authority raised interest rates by half a point. This is the first time in almost 25 years that the Bank of Canada has doubled in half. And justified this move by analysts due to fears of losing control over inflation, which was 6.8% in April, which was higher than the company’s forecasts.

The Central Bank of Canada, one of the ten largest economies in the oil-producing country, expects inflation to continue in the short term and extend to more products in the economy, with its inflation target at 2% to almost 70%, while consumers with inflationary pressures of more than 3% Price Index (CPI).

“The risk of persistent high inflation has increased. The bank will use its monetary policy tools to bring inflation to its target and control inflation expectations well,” the Canadian financial institution said. It said new increases in interest rates were necessary and were ready to act “with greater force” to control inflation.

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