The Bank of Canada raised its overnight rate by half a percentage point to 1.5 per cent Wednesday and signalled more increases to come, as it aims to curb out-of-control inflation, which is now at its highest level in 30 years.
Here’s how we got here:
Oct. 24, 2018: The Bank of Canada’s key interest rate reached 1.75 per cent after gradually increasing since the 2015 oil price crash that rippled through the Canadian economy. That rate remained unchanged throughout 2019.
March 4, 2020: The Bank of Canada cut its key interest rate by half a percentage point to 1.25 per cent amid economic concerns stemming from COVID-19, just days before the World Health Organization declared a global pandemic.
March 13, 2020: The Bank of Canada announced that it would lower its overnight rate target by another half percentage point to 0.75 per cent, effective March 16, in a rare unscheduled announcement. At the time, the central bank called the decision a “proactive measure” in response to the pandemic worsening, as well as the significant drop in oil prices.
March 27, 2020: The Bank of Canada lowered its key interest rate to 0.25 per cent, a record low, and launched a quantitative easing program (or government bond-buying program) to further stimulate the economy as COVID-19 continued to spread around the world.
October 27, 2021: With the economy showing signs of new life and COVID-19 restrictions lifting, the Bank of Canada announced it was ending its quantitative easing program.
March 2, 2022: After keeping its key interest rate at 0.25 per cent for two years, the Bank of Canada raised it to 0.50 per cent. This came amid stubbornly high inflation and an increasingly volatile global economic landscape driven by Russia’s invasion of Ukraine.
April 13, 2022: The Bank of Canada further hiked its key interest rate by half a percentage point to one per cent. The last time the central bank raised the overnight target rate by half a percentage point rather than a quarter was in May 2000.