Canada's annual inflation rate reportedly rose faster than expected in March, hitting a 31-year high amid mounting price pressures. This is based on official data released a moment ago which carries an indication that the Bank of Canada to raise interest rates even more in June.
The inflation rate reportedly hit 6.7% in March, well above analysts ’expectations of 6.1% and 1% higher than in February. The reading for this month carries an indication that the 12th consecutive month is above the central bank control range of 1%-3%. The March reading is slightly less than the January 1991 reading of 6.9%.
The higher -than -expected figure raises the likelihood that the Bank of Canada will make another big rate hike at a meeting in June. The BoC had raised rates by half a percentage point in the past week and gave an indication that more hikes would be implemented to fight inflation.
The Canadian dollar rose to a three -week high of 1.2503 against the U.S. dollar, or 79.98 U.S. cents, after the data.
Governor Tiff Macklem last week said the central bank would continue to act “forcibly” if necessary. The money market sees a 65% chance the Bank of Canada will continue to raise rates with a 50 basis point increase.
On the other hand the standard measure of CPI, the best measure of economic performance as stated by the Bank of Canada, rose to 2.8% from 2.7% revised in February.
