China News Agency, Toronto, January 25 (Reporter Yu Ruidong) The Central Bank of Canada announced on the 25th that it will increase the benchmark interest rate, the overnight lending rate, by 25 basis points, from 4.25% to 4.5%.
At the same time, in the context of judging that core inflation has peaked, the Bank of Canada predicts that this round of continuous interest rate hikes may come to an end.
In order to curb high inflation, the Bank of Canada has raised interest rates eight times in a row since March last year. The benchmark interest rate has been raised from 0.25% to 4.5%, with a total of 425 basis points of interest rate hikes.
Globally, inflation remains high and broad-based, the Bank of Canada said.
But inflation is falling in many countries amid lower energy prices and improved global supply chains.
The Bank of Canada expects the global economy to grow by about 3.5 percent last year, slow to about 2 percent this year, and rise to 2.5 percent next year.
From the perspective of Canada, the Bank of Canada believes that the recent growth is better than expected, and the economy is still in a state of excess demand.
Unemployment is near record lows and there is still a labor shortage.
But restrictive monetary policy is slowing economic activity, with both consumption and investment on a slowing trend.
The Bank of Canada forecasts that the Canadian economy grew by 3.6% last year, slightly higher than previously expected, but growth will stagnate in the middle of this year and is expected to pick up in the second half of the year.
The Bank of Canada expects the country's inflation rate to fall to about 3 percent by the middle of this year and fall back to its 2 percent target next year.
Bank of Canada Governor Steve Macklem said the means of raising interest rates so far have worked, but the pause in further rate hikes is conditional on the fact that the economy develops broadly in line with the outlook in the monetary policy report.
He also declined to predict when a rate cut would occur.
The Bank of Canada also stated that it will continue to implement the quantitative tightening policy.
The Bank of Canada's next interest rate meeting is March 8.
According to data recently released by Statistics Canada, the country's consumer price index (CPI) will rise by an average of 6.8% year-on-year in 2022, the highest increase in 40 years.
The growth rate of inflation accelerated month by month in the first half of last year, reaching a high of 8.1% in June; it slowed down in the second half of the year, falling back to 6.3% in December.
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