Tuesday, December 06, 2022

Canada raised rates by 0.75 points and kept them at their highest since 2008

bank of canada has decided to increase the interest rates of the country 75 basis pointsuntil they are kept at 3.25%Which represents the highest value of money recorded in the country just before the 2008 crisis. “The effects of the Covid-19 outbreak, persistent supply problems and the war in Ukraine continue to undermine growth and drive up prices”, the agency warned in its statement.

In July, the date of the latest available data, Inflation in Canada stood at 7.6%, Five tenths less than the previous month due to the fall in petrol prices. However, the bank indicated that if this effect is discounted, there are general price pressures. Facing high mortgage rates, the real estate market is slowing down from “continued growth during the pandemic.”

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In January, Canada’s interest rates were at 0.25%, their lowest possible level, Therefore, the pace of monetary normalization has been particularly high. In July, rates were raised by 100 basis points after two 50-point hikes in April and June.

“Bank of Canada” Remains worried about excess demand and higher inflation expectations Despite recent weak readings for inflation and GDP. More hikes are on the way, but are likely to be slow, with the benchmark rate reaching 4% before the end of the year,” ING analysts note.

the bank that runs tiff macallem The economy is expected to moderate in the second half of this year, as global demand weakens and tighter monetary policy in Canada begins to align demand with supply. “Given the inflation outlook, the Governing Council Still believes that the interest rate will need to be raised further. As the effects of tighter monetary policy resonate through the economy, we will assess how much more interest rate hikes are needed for inflation to return to target.”

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