Bank of Canada must raise rates to curb inflation – Bank of Canada governor

But banks are facing public criticism for growing in many Canadians already struggling to afford groceries and other necessities the cost of borrowing. “By raising interest rates, we will slow spending in the economy, giving the economy time to catch up and eliminate inflation,” Macklem said in the video . “This will bring inflation down.”

The central bank has raised interest rates 11 basis points for six months as it looks to bring inflation back to its 2% target. Inflation in Canada edged down to 7.0% in August from 8.1% in June and 7.6% in July. The Canadian dollar fell to its lowest level since May 25 at 1.52 against USD, or . cents before reclaiming some of its decline, as well as broad currency market volatility. 11