The Central Bank of Canada has increased the base interest rate. According to the official communication, the intention to reduce some of the incentives in the current monetary policy has become the reason for this.
Analysts did not expect such a decision. The forecasts said that the interest rate would remain at the level of 0.75%. However, the rate is 1% at the moment. This news initiated the growth of the Canadian dollar against the US dollar. On Wednesday, the growth amounted to 1.2% (this is the maximum for the last two years). The growth in relation to the European currency totaled 1.1% and against the pound – 1.4%.
In its official report, the Central Bank of Canada also noted that the growth of the economy of that state was the most significant among all G7 countries. Despite the rapid pace of development, the central bank notes the existence of some risks to the economy. Above all, fears are caused by the production overcapacity, geopolitical risks, lowering pressure on prices and salaries.
The National Bank of Canada also states that at the moment the central bank has no ready decisions on the monetary policy. Decisions are expected to be made based on the current economic situation.
The increase in the interest rate in Canada to a value of 1% draws the attention of traders to the meeting of ECB (European Central Bank), which will take place today.
The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade