The Bank of Canada announced the raising benchmark interest rate to 2.5%

Xinhua News Agency, Ottawa, July 13 (Reporter Lin Wei) Bank of Canada (central bank) announced on the 13th that it would raise a substantial interest rate rate of 100 basis points, raising the benchmark interest rate to 2.5%. This is the fourth time the Bank of Canada has announced interest rates since this year.

The Bank of Canada also announced that it would continue to quantify and reduce the scale of the balance sheet to cooperate with the interest rate hike policy to further relieve the pressure of inflation.

Bank of Canada said that the inflation rate in Canada may remain at about 8%in the next few months, the inflation level is higher than expected, and the duration is long. The inflation rate is expected to begin later this year, and it will not be able to return to the level of 2%of the policy target until the end of 2024.

Bank of Canada predicts that the economic growth rate of Canada in the second quarter of this year is about 4%. As consumer growth slows down and the housing market is cooling, the economic growth rate will drop to about 2%in the third quarter. The Canadian economy will increase by 3.5%in 2022, 1.75%in 2023, and an increase of 2.5%in 2024.

After the new crown epidemic broke out in Canada in early 2020, the Bank of Canada quickly lowered the benchmark interest rate, down from 1.75%in February of that year to 0.25%in March. In January of this year, the Bank of Canada President Tives McLem said that Canada is expected to enter a gradual interest rate hike channel this year. The Bank of Canada announced in March that 25 basis points raised interest rates. After the 50th basis points were announced in April and June, the benchmark interest rate was adjusted to 1.5%.

[Editor in charge: Feng Li]

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