23 September 2009

Bank of Canada: rate hike after mid-2010 possible

The following was reported on in the 23 September 2009 edition of "Reuters Canada".

The Bank of Canada foresees higher interest rates following the expiry of its conditional pledge to hold them unchanged till the middle of 2010, Deputy Governor David Longworth said on Wednesday.

"Interest rates are low and consistent with our projection of inflation, one would expect there would be some movement up in interest rates following the end of June 2010, but anything to do with magnitude would depend on our future inflation projection," he said after a speech in Prince Edward Island.

It was the most explicit statement the central bank has made about what could happen after mid-2010. However, Longworth did not specify exactly when to expect a rate hike.