Reuters

Bank of Canada to Announce Interest Rate Decision on Wednesday

Policymakers Ready to Hike Again if Inflation Target Not Met

Bank Rate Has Already Been Raised Four Times in 2023

The Bank of Canada will announce its decision on the target for the overnight rate on Wednesday, September 6. Expectations are rising that the bank will hold its key interest rate steady at 5.00%, in line with the median forecast of economists surveyed by Bloomberg. However, policymakers have made it clear that they are ready to raise rates again if necessary to bring inflation back to the 2% target.

The bank has already raised its policy rate four times this year, by a total of 225 basis points. This has been the fastest pace of rate hikes since the early 1990s, and it has led to a sharp increase in borrowing costs for businesses and consumers.

The bank's decision on Wednesday will be closely watched by markets and policymakers around the world. It will provide further insight into the bank's assessment of the economic outlook and its willingness to continue raising rates to combat inflation.

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