In the post meeting press conference, BoC Governor Tiff Macklem said, the impact of the invasion of Ukraine on Canadian economic is “likely to be small” for two reasons. Firstly, “our economic links to Ukraine and Russia are very limited”. Secondly, “while the war has reduced global growth overall, it has increased the demand and prices for commodities we produce and export, such as oil, potash and wheat.”
He also said Canadians should expect interest rates to “continue to rise toward more normal settings”. BoC estimates the neutral interest rate to be “between 2% and 3%”. After today’s rate hike, policy rate at 1% is “still well below neutral” and “below the pre-pandemic policy rate of 1.75%”.
Full press conference statement here.
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