Central Bank of Canada (BOC) Governor Tiff Macklem has not ruled out the possibility that the central bank will consider another rate hike of 50 basis points in its next policy decision.
Testifying to the House Finance Committee, Macklem told that inflation is too high and will remain for a longer period than previously expected.
The rapid recovery has begun to see demand running ahead of the productive capacity of the economy while businesses are unable to find enough workers to meet demand.
Therefore, the central bank is committed to raising rates to bring inflation back to target despite having to do so ‘by force’. Canadian inflation is currently at a 31 -year high after rising 6.7% in March.
When asked if the rise in inflation in March was its peak, Macklem said it may be approaching it.
The BOC earlier this month had implemented an increase of 50 basis points up to 1.00% and Macklem acknowledged that they are considering an increase at the same rate in the next meeting.
The Canadian dollar traded 0.1% higher at 1.2700 at the start of the European session, rising from a nearly one -month low it touched earlier.
