Bank of Canada Raises Interest Rate to 4.75 Percent

Posted on 06/08/2023

The Bank of Canada increased its target for the overnight rate to 4.75%, with the Bank Rate at 5% and the deposit rate at 4.75%. The Bank of Canada is also continuing its policy of quantitative tightening.

In Canada, underlying inflation remains stubbornly high.

According to the press release, “While economic growth around the world is softening in the face of higher interest rates, major central banks are signalling that interest rates may have to rise further to restore price stability. In the United States, the economy is slowing, although consumer spending remains surprisingly resilient and the labour market is still tight. Economic growth has essentially stalled in Europe but upward pressure on core prices is persisting. Growth in China is expected to slow after surging in the first quarter. Financial conditions have tightened back to those seen before the bank failures in the United States and Switzerland.”

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