Bank of Canada Raises Rate by 0.25 % to 4.25 %

The Bank of Canada on May 24 announced that it is raising its target for the overnight rate by one-quarter of one percentage point to 4.25 %. The operating band for the overnight rate is correspondingly increased, and the Bank Rate is now 4.5 per cent.

The strong momentum in the global and Canadian economies has continued, although there has recently been an increased degree of volatility in commodity markets, foreign exchange markets, and financial markets more generally. Recent Canadian data confirm that domestic demand remains solid, and that both CPI and core inflation are evolving largely in line with the Bank's expectations.