In the next meeting of the Central Bank of Canada, a decision was made on interest rates. They were raised by 0.25 percentage points to 1.75 per cent. This is the third time that the bank has decided to raise its interest rates this year.
The Head of the Bank of Canada Stephen Poloz took part in the press conference. He noted that even with the latest decision the interest rates are still far from being neutral. It ranges from 2.5 to 3.5 per cent. Investors took this statement as a signal of the Central Bank’s intention to continue increasing its rates. Stephen Poloz believes that the growth rate of the Canadian economy has already reached trend levels. Therefore, there is no longer a need to take measures to stimulate economic development. The Canadian Central Bank has an important task ahead of it. It is to prevent the economy from overheating and inflationary pressures.
According to the official forecast, Canadian GDP will grow by 2.1 percent annually in the next two years. The bank’s statement also says that trade friction between the U.S. and China may have a negative impact on the global economy. However, the Canadian economy will suffer only slightly if it does.