Bank of Canada Rate Announcement – January 26, 2022
January 26, 2022
Bank of Canada holds on raising interest rates to help slow down surging inflation. The central bank’s overnight rate remains at 0.25 per cent which was a rate that was adopted during the pandemic.
The Bank of Canada late last year sent out hints that the interest rates would rise middle of 2022 and seems that would be the case even though many were predicting it would be earlier in the year in the effort to cut inflation on housing and consumer goods.
The Bank of Canada wrote in a monetary policy report released alongside the interest rate decision Wednesday that it expects inflation will remain around five per cent for the first half of 2022, citing supply chain constraints and rising food prices.
The central bank expects inflation to fall back down to three per cent by the end of the year and back towards the target rate of two per cent by 2024.
The monetary policy report notes uncertainty is “unusually high” around its latest inflation projections amid factors such as the ongoing pandemic and supply chain issues.