Bank of Canada Raises Interest Rates by 75 Basis Points

[MongiIG]

BANK OF CANADA, USDCAD - TALKING POINTS

• Bank of Canada raises policy rate by 75 basis points
• USDCAD gyrates below 1.3200 following rate hike

The Bank of Canada (BoC) raised interest rates by 0.75% on Wednesday, firmly in-line with the market expectations. The rate hike comes as Canada looks to cool inflation that sits at 40-year highs. Majority of economists surveyed prior to the rate hike saw a 75 basis point move, with money markets were also effectively priced for 75 bps.

The hike brings the policy rate to 3.25%, the highest among major advanced economies. This also sees the BoC enter “restrictive” territory, as the bank remains keen on lowering sticky inflation. The policy statement showed that central bank officials remain keen on continuing rate hikes in the near future, stating the “Governing Council still judges that the policy rate will need to rise further.”

CANADIAN ECONOMIC CALENDAR

Courtesy of the DailyFX Economic Calendar

 

Sep 7, 2022 | DailyFX
Brendan Fagan, Contributor