CBC News ~ June 7th, 2023
The Bank of Canada decided to raise its benchmark interest rate to 4.75 per cent on Wednesday.
It’s the first time that Canada’s central bank has raised its trend-setting interest rate since January, when the bank signalled it would conditionally pause its aggressive campaign of rate hikes to wait and see if it had done enough to bring down inflation.
Since then, the data has shown the Canadian economy to be unexpectedly resilient, as it has grown by more than expected. After declining for nine months in a row, the inflation rate unexpectedly ticked higher last month.
The bank’s latest move to increase its target for the overnight rate from 4.5 per cent to 4.75 per cent takes the bank’s benchmark to its highest level since 2001.
While investors and economists thought there was a slight chance the bank would raise the rate now, the move nonetheless came as a surprise to the consensus view that the bank would probably do so later this year.
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