Today The Bank of Canada moved its key interest rate up to 4.5%, the highest level in 15 years. After today’s hike, it said it would likely hold off on further increases for now. That statement made it the first major central bank fighting global inflation to signal a pause in rate hikes.
According to Reuters, that 25-basis-point increase was in line with analysts’ expectations. The bank has raised rates at a record pace of 425 basis points in 10 months to tame inflation, which peaked at 8.1% and slowed to 6.3% in December, still more than three times the bank’s 2% target.
If the economy evolves as forecast, the bank “expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases,” the statement announcing the rate hike said.