The Bank of Canada raised the overnight rate by 75 basis points to 3.25 percent, the highest level since April 2008.

In the statement made by the bank, it was stated that the monetary tightening policy was continued.

The statement noted that 75 basis points increased the overnight interest rate from 2.5 percent to 3.25 percent. Thus, the interest rate in Canada reached its highest level in 14 years.

Pointing out that the effects of the Kovid-19 epidemic, ongoing supply cuts, and the war in Ukraine continue to reduce growth and increase prices, it was emphasized that global inflation remains high.

In the statement, it was stated that central banks worldwide continue to tighten their monetary policy. At the same time, the economic activity in the USA has been moderate despite the tight labor market, while China is facing ongoing difficulties arising from the Kovid-19 shutdowns.

It was emphasized that interest rates should be increased further to reduce inflation to 2%.

Pointing out that commodity prices are volatile, it was noted that oil, wheat, and timber prices became moderate while natural gas prices rose.

The statement reported that inflation in the country decreased from 8.1 percent to 7.6 percent in July due to the decrease in gasoline prices.

Pointing out that the data show that the price pressures, especially in the service sector, are expanding, it was stated that short-term inflation expectations remain high.

“Given the inflation outlook, the Board of Directors is still of the opinion that the policy rate should rise further,” the statement said. The assessment was included.

Emphasizing that the Bank’s Board of Directors remains determined in its commitment to price stability, it was noted that necessary steps would continue to be taken to reach the 2 percent inflation target.