The Canadian central bank has raised its key interest rate again. However, she held out the prospect of a temporary end to the rate hikes. The Bank of Canada in Ottawa announced that the key interest rate would be increased by 0.25 percentage points to 4.50 percent. On average, experts had expected an increase of this magnitude. It was the eighth rate hike in a row.
However, it could have been the last interest rate hike for the time being. “If economic developments are broadly in line with forecasts, the Council expects to hold interest rates at their current level while assessing the impact of past rate hikes,” it said in a statement. However, one is ready to raise the key interest rate further if this should be necessary to bring inflation back to the two percent target. Inflation fell to 6.3 percent in December. In June it was still 8.1 percent.
The promised interest rate pause came as a surprise to the financial markets. The Canadian dollar came under pressure against all major currencies. Canadian bond yields fell noticeably.
