Money in Canada
Canada - Money
Bank of Canada hikes rates by 50 basis points in October
On 26 October, the Bank of Canada (BoC) raised its target for the overnight rate from 3.25% to 3.75%, and announced it was continuing to reduce the stock of outstanding government bonds.
The decision aimed to curb inflation, which is still over double the upper bound of the Bank’s 1.0–3.0% target range despite having declined from its mid-year peak. Core inflation is roughly double the upper bound. The Bank also pointed to high near-term inflation expectations, the tight labor market and excess domestic demand as additional factors behind the hike.
In its forward guidance, the Bank reiterated that interest rates would need to continue to rise in order to ensure inflation converges to the 2.0% target. The Consensus is for rates to peak at slightly above 4% in mid-2023 before dipping slightly by year-end.
The BoC’s next policy announcement will be on 7 December.
Our panelists project the target for the overnight rate to end 2023 at 3.76% and 2024 at 2.95%.
Canada - Money Data
|Money (annual variation in %)||6.0||8.5||5.8||5.2||7.8|
5 years of economic forecasts for more than 30 economic indicators.
Canada Money Chart
Source: Bank of Canada.
|Bond Yield||1.70||1.00 %||Dec 31|
|Exchange Rate||1.30||0.15 %||Jan 01|
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