BOC hikes interest rates by 1% The Bank of Canada caught the markets off guard by raising rates 100 basis points, taking its key interest rate to 2.5%. This is the biggest one-time hike since 1998.
The reason for such an aggressive move was stubbornly high inflation.
"Inflation in Canada is higher and more persistent than the Bank expected in its April Monetary Policy Report (MPR), and will likely remain around 8% in the next few months," Canada’s central bank said Wednesday.
Markets expected a 75-basis-point hike in July after the Bank raised rates by 50 basis points in June.
Following the announcement, gold priced in Canadian dollars dropped back towards 8-month lows, last trading at CAD$2,240.42 an ounce, down 0.33% on the day.