The Bank of Canada has published a summary of the Board of Governors meetings, providing the public and financial institutions with more information about the decision to raise the key interest rate on January 25.
The Board of Governors, consisting of six members, including the Governor of the Bank of Canada, Tiff Mcclem and his deputies, met five times, starting on January 18.
At these meetings, the possibility of suspending the rate increase at the level of 4.25 percent was discussed.
Ultimately, the council’s consensus on the rate hike was driven by the tense labor market situation and concerns about stronger-than-expected economic growth in the third and fourth quarters of 2022. Despite this, it was also decided to pause in raising rates in order to assess the full effect of the forced tightening.
The members of the council regarded the tense labor market as a sign that excessive demand remains in the economy, and predict that the rebalancing of the labor market may take longer than usual, as enterprises continue to face a shortage of labor.
The Central Bank plans to continue publishing summary reports on the meetings of the Board of Governors. The decision to publish them was made in response to the recommendations of the International Monetary Fund in its review of the transparency of the central bank.