After holding interest rates at 4.50% three times since January 25, 2023, the Bank of Canada finally decided to raise it by a quarter percentage point from 4.50% to 4.75%.
In a statement released on Wednesday, the Bank of Canada said: “In Canada, the economy was stronger than expected in the first quarter of 2023, with gross domestic product growing 3.1%. The increase in consumption was surprisingly strong and widespread.”
Note that on January 25th, the Bank of Canada raised interest rates for the eighth year in a row. Since then it has stood at 4.50%.
The Governing Council said it had decided to raise the key interest rate because it believed that “monetary policy was not restrictive enough to restore the balance between supply and demand and ensure a sustainable return to the 2% inflation target”.