Toronto/CMEDIA: The Bank of Canada released on Wedneaday a summary of meetings of its Governing Council made up of six members including Bank of Canada Governor Tiff Macklem and his deputies , providing the public and financial institutions with more insight into the central bank’s decision on Jan. 25 to raise its key interest rate to 4.5 percent, an increase by a quarter of a percent.
The Governing Council met five times starting on Jan. 18, before their decision on Jan. 25 to raise the overnight rate and decided to pause the rate at 4.25 per cent.
“The case for leaving the policy rate at 4.25 per cent was that developments with respect to both the economy and inflation…Council concluded that wage momentum was plateauing in the range of 4 per cent to 5 per cent,” repotedly reads the summary released on Wednesday.
By focusing around the international economy, the discussions focused mainly on the United States reaching its debt ceiling, and how negotiations in U.S. Congress around raising it could pose risks of financial volatility including China’s rapid relaxation of COVID-19 policies, which could pose a risk of higher oil prices, if China’s demand outweighs what was initially expected.
Overall members of the council concluded global inflation had edged down from its peak and the risk of a deep recession had decreased.
The central banks decision to release these summaries of Governing Council meetings was in response to recommendations made by the International Monetary Fund in its transparency review of the central bank.
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