China News Service, Toronto, July 13 (Reporter Yu Ruidong) The Central Bank of Canada announced an interest rate hike on July 13, raising the benchmark interest rate, the overnight lending rate, by 100 basis points from 1.5% to 2.5%.

　　This is also the fourth consecutive rate hike by the Bank of Canada since March this year, and its magnitude has also been increasing.

This rate hike is higher than the 75 basis points widely predicted by the market before, and it is also the largest single rate hike by the Bank of Canada since August 1998.

　　Bank of Canada Governor Tiff Macklem said the 1% rate hike was unusual and reflected the unusual economic conditions in which inflation is nearing 8%, a level not seen in nearly 40 years.

　　The Bank of Canada said inflation in Canada was higher than expected in the central bank's April monetary policy report and was more persistent.

Global factors such as the Russia-Ukraine crisis and ongoing supply chain disruptions are still the main drivers of inflation, but domestic price pressures from excess demand are becoming more prominent.

　　In addition to high inflation, Macklem said there are two key considerations for this big rate hike: Canada's overheating economy, with shortages of workers and many goods and services; and the need for a soft landing to bring inflation back to 2 percent Target.

　　Higher interest rates will further increase the difficulty of high inflation that people are already facing, but short-term high interest rate pressures will reduce inflation in the long term, he said.

　　The Bank of Canada expects that interest rates will need to rise further.

The next interest rate meeting is on September 7.

The Bank of Canada also said that it will continue to implement quantitative tightening policy.

　　In its latest monetary policy report released on the same day, the Bank of Canada forecasts that inflation will begin to decline later this year, falling to around 3% by the end of next year, before falling back to its 2% target by the end of 2024.

　　The Bank of Canada also expects Canada's economy to grow by 3.5% this year, 1.55% next year and 2.5% in 2024.

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