OTTAWA - The Bank of Canada has raised its key overnight interest rate by a quarter percentage point to 4.25 per cent, as expected, but signaled it would not raise rates further at least for now.
For the first time since September, the bank's statement accompanying its interest rate
decision made no mention of the possible need for further rate hikes.
"With today's increase, the target for the overnight rate is now at a level that is expected to keep the Canadian economy on the base-case path projected in the April Monetary Policy Report and to return inflation to the 2 per cent target," the bank said in its statement.
Recent data have confirmed that domestic demand is robust and that overall inflation and core inflation, which strips out the most volatile items, are "evolving largely in line with the Bank's expectations," it said.
It also noted continued strong economic momentum in the global and Canadian economies but warned of increased volatility in commodities markets as well as in foreign exchange and financial markets generally.
- REUTERS
