BoC raises overnight rate by 25bps to 0.50% as widely expected. The Bank Rate and the deposit rate now stand at 0.75% and 0.50% respectively. The policy rate is the “primary monetary policy instrument”. It added, “as the economy continues to expand and inflation pressures remain elevated, the Governing Council expects interest rates will need to rise further.”
BoC also said it’s “continuing its reinvestment phase” of QE, and keep its overall holdings of government bonds “roughly constant”. The timing of rate hike and quantitative tightening will be “guided by the Bank’s ongoing assessment of the economy and its commitment to achieving the 2% inflation target.”
