Why is Canada raising its interest rate?

Canada’s central bank said Wednesday it is raising its target interest rate by a full percentage point in an effort to fight inflation — and warned more rate hikes are likely to follow. The Bank of Canada raised the overnight rate to 2.5% in the biggest increase since 1998 and the highest level since 2008.

What is the bank of Canada interest rate?

The Bank of Canada's key interest rate is 5 per cent. What’s happening with inflation in Canada? Canada is experiencing the first period of high inflation in a generation. Over the past two years, goods and service prices have risen rapidly, eroding the purchasing power of the dollar and making life less affordable for Canadians.

What happens if the Canadian Central Bank sets a new target?

If the Canadian central bank has set a new target for the level of the key interest rate this will usually also lead to a change in the interest rates for loans, mortgages and savings. It can also have an effect on the exchange rate of the Canadian dollar. This page shows the current and historic value of the BOC’s key interest rate.

Who sets the benchmark interest rate in Canada?

In Canada, benchmark interest rate is set by the Bank of Canada's (BoC) Governing Council. The official interest rate is the Overnight Rate. Since 1996 the Bank Rate is set at the upper limit of an operating band for the money market overnight rate.