Bank of Canada maintains key rate despite record inflation

AA / Montreal / Hatem Kattou
The (Central) Bank of Canada announced on Wednesday that it would maintain its key rate at 0.25% despite an increase in the rate of inflation which reached the threshold of 4.4% in September. never reached since 2003.
This is what emerges from a press release posted on Wednesday by the Federal Bank on its electronic site.
The Bank also indicates that “the official discount rate remains at 0.5%, that of interest on deposits at 0.25%”.
The federal body added that “the (Canadian) economy is once again showing robust growth, after a pause in the second quarter” of 2021.
“The strong employment gains recorded in recent months were concentrated in sectors where distancing is difficult and among the workers most affected by the lockdowns. This has considerably reduced the very uneven impact of the pandemic on workers, ”the text continues.
Regarding the outlook, the Bank forecasts “that the growth of the Canadian economy will reach 5% this year, before moderating to stand at 4.25% in 2022 and 3.75% in 2023”.
The Bank of Canada motivated these figures by “demand which should be supported by strong consumption and business investment, as well as the rebound in exports due to the continuing recovery of the US economy.”
Regarding inflation, the press release points out that “the recent increase in inflation measured by the consumer price index (CPI) was anticipated in July, but the main forces pushing up prices – prices higher energy and pandemic supply-side bottlenecks – now appear more powerful and persistent than expected ”.
“Measures of core inflation have also increased, but less than the CPI. The Bank now expects inflation as measured by the CPI to be high through the next year, and gradually fall back to around the 2% target by the end of the year. 2022 ”, details the Bank.
The inflation rate reached a ceiling of 4.4% last September, the highest rate since February 2003.
“The recovery of the world economy after the shock of the Covid-19 pandemic is progressing”, underlines, moreover, the Bank.

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