June 3, 2023

The Queens County Citizen

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Bank of Canada governor says interest rates need to rise further

Bank of Canada governor says interest rates need to rise further

(OTTAWA) Bank of Canada Senior Deputy Governor Carolyn Rogers said addressing supply issues could help ease inflationary pressures, but such policies would not replace the need for interest rates.

Posted yesterday at 10:07 pm.

Mme Rogers and Bank of Canada Governor Tiff Macklem appeared before the Senate Banking Committee on Tuesday evening and answered senators’ questions about the bank’s monetary policy and finances.

In his opening remarks, Mr Macklem reiterated the need for higher interest rates to calm inflation, but said the cycle of monetary tightening was coming to an end.

If we don’t do enough, Canadians will continue to struggle with high inflation.

Tiff Macklem, Governor of the Bank of Canada

Officials were asked if the government could play a role in combating hyperinflation and in response, Mme Rogers said policies that address supply-side problems could help reduce inflation.

Mme However, Rogers said such policies would be complements to interest rate hikes, not substitutes.

“We have to do our job, other decision makers have to do theirs,” she said.

Six increases

Last week, the central bank raised interest rates for the sixth time in a row this year, raising its key rate by half a percentage point and signaling that rates could rise further.

Canada’s annual inflation was 6.9% in September, but has been decelerating since hitting the year’s highest rate of 8.1% in June.

The Bank of Canada also released its monetary policy report last week, indicating that the Canadian economy is headed for a significant slowdown towards the end of the year and into the first half of 2023.

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Bank of Canada officials are usually called to testify after the release of the April and October monetary policy reports.