Canada Global (Web News) On Wednesday, the Bank of Canada increased its benchmark interest rate once more, but added that this could be the apex of the current tightening cycle.
In its first move of 2023, the central bank lifted its policy rate by 25 basis points, to 4.5 percent. The Bank of Canada’s benchmark rate has not been this high since 2007.
With its decision on Wednesday, the Bank of Canada increased borrowing costs for the eighth straight time, raising the benchmark rate by a total of 4.25 percentage points over the course of the previous year in a bid to contain inflation.
The majority of economists anticipated the 25-basis-point change.
However, the central bank stated in a statement released alongside the rate hike that it anticipates keeping the policy rate steady as it evaluates the results of its prior increases.
The Bank also stated that the hold depends on whether the economy develops as predicted and that further increases are anticipated to bring inflation back to the target range of 2%.
From a peak of 8.1% in mid-2022, headline inflation has declined, most recently measuring 6.3% in December. Food costs and certain other inflationary inputs are still under pressure.