Canadian Central Bank Decision Makes Markets Less Optimistic - Here's Why! - Kakiforex.com - Financial Market Media No. 1 in the World Canadian Central Bank Decision Makes Markets Less Optimistic - Here's Why! Canadian Central Bank Decision Makes Markets Less Optimistic - Here's Why!
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September 9, 2021

Canadian Central Bank Decision Makes Markets Less Optimistic - Here's Why!

 The Bank of Canada announced to keep its key interest rate unchanged at 0.25%.


The overnight interest rate was maintained at its lowest level since the outbreak of the Covid-19 pandemic and at the same time the central bank stressed that interest rates would not be raised until the economy recovers and bond-buying rates are maintained.


Economists expect that interest rates will start to rise by mid -2022. However, the annual inflation rate of 3.7% in July has invited criticism among experts who are expected to influence the central bank's strategy.



This increase in inflation was largely due to the home replacement cost index which increased 13.8% year -on -year. This rate of surge is the largest since 1987 based on the Stat Can report.


In a policy update today, the central bank stated that CPI inflation remained above 3% as expected driven by petrol prices and supply shortages. At the same time emphasize that it is driven by temporary factors.


It should be known apart from the inflation factor which has been criticized by some parties. A large number of Canadians believe low interest rates have an impact on rising house prices. Thus many are dissatisfied with the lack of change in interest rates.


The Bank of Canada will make its next interest rate announcement on October 27 in conjunction with the publication of its quarterly Monetary Policy Report. The US dollar strengthened by 0.70% against the Canadian dollar following the release of interest rate reports.