The Bank of Canada decided in its meeting moments before to raise interest rates by 50 basis points to reach 1.50%, as expected. The interest report from the Bank stated that the Canadian economy is strong, as the gross domestic product grew by about 3.1% in the first quarter, in line with the monetary policy report issued in April.
The statement added that wage growth is recovering and expanding across sectors.
The inflation index represented by the consumer price index is rising affected by the rise in energy and food prices, as inflation reached 6.8% in April, which is a much higher level than the bank’s expectations.
Inflation to target.
The Council believes that with the continuation of inflation above the target, it must continue to raise interest rates and that it will be more powerful if this is not done.
The Canadian dollar is trading at 1.2631 levels, slightly higher against the US dollar.
02/11/2024
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