Bank of Canada increases Key interest rate to 1%

For the first time in 20 years, Bank of Canada has increased the interest rate to 1%. The policy interest rate has been increased from half a percentage point to one percentage point.

According to Tiff Macklem, Governor of Bank of Canada, inflation is too high now and is expected to stay elevated for longer than the bank speculated. He further added that “The invasion of Ukraine has driven up the prices of energy and other commodities, and the war is further disrupting global supply chains.”

Macklem has also warned Canadians about even higher interest rates in the near future. These warnings were echoed in the policy statement of the central bank.

Bank’s next interest rate announcement is scheduled for June 1; however, the release of the monetary policy report is scheduled for July 13.

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Prabhnoor Kaur