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Bank of Canada: high inflation ‘keeping us up at night

The Canadian dollar was trading 0.1 percent lower at 1.2930 to the US dollar, or 77.34 cents, having recovered some of its earlier losses. 

The Bank of Canada raised its policy rate to 1.5 percent from 1.0 percent earlier this month, its second consecutive overshoot, and stated that it would act “more forcefully” if necessary to contain price increases. 

Carolyn Rogers, Senior Deputy Governor of the Bank of Canada, stated on Wednesday that inflation in Canada is far too high and did not rule out a 75-basis-point increase at the central bank’s July decision.

” We overall comprehend that improvement is keeping Canadians conscious around evening time. It’s keeping us conscious around evening time,” Rogers said at a Globe and Mail occasion only hours after true information showed May’s expansion rate hit a close to 40-year high of 7.7 percent.

” Yet again the congruity of dangers on advancement is enthusiastically slanted to the conceivable expansion.” So, right now, the most compelling thing, as we might want to think, is to return extension to target,” she added.

When asked if this meant a 75-basis-point increase in its next decision, due on July 13, Rogers did not rule it out.

“We’ll settle on a choice in July when we arrive,” she said. “We’ve been clear up and down: the economy is overheating, expansion is excessively high, and rates need to increase.” Money markets expect a 75-basis-point increase in July, and economists said May’s surprisingly high inflation figure made such a move more likely. 

Following the July and September rate decisions, the central bank announced separately that Deputy Governor Timothy Lane would retire on September 16. The bank stated that the search for a replacement will begin immediately.

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