Bank of Canada increases the rate to 4.25% signalizing a possible pause

The Bank of Canada has raised interest rates sharply for the sixth time. In this way, it created an opportunity to pause the hiking cycle.

On Wednesday, the authorities headed by Governor Tiff Macklem increased the overnight credit rate by 50 basis points to 4.25%. This is the highest rate since 2008. Such actions have confirmed the expectations of most economists who participated in the Bloomberg survey.

The Bank of Canada released a statement. It says that the council will examine the question of further growth of an interest rate. This is necessary to maintain the balance between need and demand and return inflation to target.

Such actions mean that the authorities study new economic data, and borrowing costs will increase. Suspension of monetary tightening is expected. Two monthly inflation figures will be released on January 25. On this day, the bank should decide on the rate.