A new North American trade deal reached on Sunday may open the door for the Bank of Canada to resume raising interest rates, according to economists at some of the country’s biggest banks.
Canada’s central bank had hiked its key benchmark to 1.5 per cent in July, but did so while officials made it clear that they were closely watching the trade picture.
Then, in September, the central bank reiterated that higher interest rates would be needed to keep inflation in check, yet held firm on its policy rate. The pause came as the bank said it was “monitoring closely the course of NAFTA negotiations and other trade policy developments.”
Now, with another rate decision scheduled for Oct. 24, and with a deal struck on the new United States-Mexico-Canada Agreement over the weekend, the Bank of Canada may be poised for further monetary action. [기사 전문 ↓]