Hey there, folks! This is Nomi Saigal, and I want to break down what's happening in Canada.
So, the Bank of Canada is keeping its key interest rate steady at 5 percent. But here's the deal – they're not ruling out the possibility of cranking it up a notch in the future.
In their announcement last Wednesday, BOC recognized that the economy is slowing down, but they're shouting from the mountaintops about the big bad wolf known as inflation. Yep, it's still lurking around.
The BOC is pretty nervous about the slow progress they're making toward stable prices and the looming threat of inflation. They're saying, "We're strapping in, and if we need to, we'll push that policy rate even higher."
And as if that's not enough, they've dropped their quarterly Monetary Policy Report – basically, a deep dive into what's cooking in Canada and the global economy.
Now, rewind to March 2022. The Bank of Canada went all-out to tackle inflation, cranking up the interest rate machine. Back then, the key lending rate was taking a snooze at 0.25 percent. Fast forward to today, it's a whopping 5 percent, the highest in 22 years.
Come September, the annual inflation rate did a little dip to 3.8 percent, down from 4 percent in August. But hold the toque – it's still above their target of 2 percent.
Their grand plan? Well, they're making it costlier to borrow money, hoping that Canadians – both regular folks and businesses – will think twice before swiping that credit card. This, they believe, will help lower prices and put the brakes on the economy.
But here's the hitch: they're worried it's not happening as quickly as they'd like. Oil prices are riding higher than a moose on roller skates, and there's a chance they might go even higher if that Israel-Gaza situation turns into a full-blown regional showdown. Plus, Public and Canadian businesses are still thinking about high inflation, which makes it harder for the Bank to hit that 2 percent bullseye.
So, there you have it, folks, the lowdown on Canada's economic rollercoaster. Keep an eye on those interest rates – they can have a ripple effect on your wallet.
