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Bank of Canada hikes rates, says prepared to raise them further
Macro Matters
Bank of Canada hikes rates, says prepared to raise them further
By Steve Scherer and Ismail Shakil
July 12, 20232:11 PM EDT • Updated a day ago
OTTAWA, July 12 (Reuters) - The Bank of Canada on Wednesday hiked its key overnight rate by a quarter of a percentage point to a 22-year high of 5.0%, and said it could raise rates further because of the risk of inflation stalling above its 2% target.
The move to increase borrowing costs by 25 basis points for the second time in as many months was expected by analysts and markets. After a five-month pause, the BoC raised its overnight rate in June, saying monetary policy was not sufficiently restrictive.
The BoC in its statement dropped the line saying rates were not restrictive enough, but revised higher its growth forecast for this year and pushed back by six months to mid-2025 its expectations for getting inflation to target.
"If new information suggests we need to do more, we are prepared to increase our policy rate further," BoC Governor Tiff Macklem told reporters after the decision. "But we don't want to do any more than we have to."
{snip}
Bank of Canada hikes rates, says prepared to raise them further
By Steve Scherer and Ismail Shakil
July 12, 20232:11 PM EDT • Updated a day ago
OTTAWA, July 12 (Reuters) - The Bank of Canada on Wednesday hiked its key overnight rate by a quarter of a percentage point to a 22-year high of 5.0%, and said it could raise rates further because of the risk of inflation stalling above its 2% target.
The move to increase borrowing costs by 25 basis points for the second time in as many months was expected by analysts and markets. After a five-month pause, the BoC raised its overnight rate in June, saying monetary policy was not sufficiently restrictive.
The BoC in its statement dropped the line saying rates were not restrictive enough, but revised higher its growth forecast for this year and pushed back by six months to mid-2025 its expectations for getting inflation to target.
"If new information suggests we need to do more, we are prepared to increase our policy rate further," BoC Governor Tiff Macklem told reporters after the decision. "But we don't want to do any more than we have to."
{snip}