A senior official says that the BoC will do what is necessary to counter inflation risks
With the pace of Canadian inflation reaching a 30-year high in January, a senior official at the Bank of Canada said that the institution is prepared to do what is necessary – including aggressive rate hikes – to counter the risks of forecast-defying inflation rates.
“We will be nimble – and if necessary, forceful – in using our monetary policy tools to address whatever situation arises, as we have done throughout these turbulent times,” deputy governor Timothy Lane said in a speech Wednesday (Feb. 16).
The BoC’s next policy decision is scheduled on March 2. Despite multiple macroeconomic pressures, the central bank has kept its benchmark rate at the effective lower bound of 0.25% during its last few meetings.
Read more: BoC on how its 2022 rate hikes will proceed
Experts recently polled by Bloomberg are anticipating as many as seven rate hikes over the next 12 months.
“We’re going to certainly consider starting that process fairly… We’ll be doing that as soon as we’re starting to raise rates,” Lane said. “Quite likely we’ll be saying something about that in a couple weeks’ time when we’re actually at … our next decision point.”
However, BoC spokesperson Paul Badertscher said that the institution’s leaders have not made a policy decision as of press time.
“Governing Council follows a clear deliberation process for every policy decision,” Badertscher said. “Decisions are taken at the end of governing council’s deliberations, and the deliberations for the March 2 announcement have not yet happened.”
