Canada Raises Benchmark Interest Rate to 1.5%

The Canadian Central Bank decided to raise its benchmark interest rate by 50 basis points for the second time in a row, warning that it is ready to further tighten monetary policy to stem the acceleration of inflation.

After the monetary policy meeting, the Canadian central bank decided to raise the interest rate to 1.5% from 1% previously, in a move that came in line with analyst expectations.

Canada's 50 basis point interest rate hike in two previous consecutive meetings is the first since the start of monetary policy meetings on a fixed date in 2000.

"The Bank of Canada is prepared to act more aggressively, if necessary, to fulfill its commitment to achieve the 2% inflation target," the Canadian central bank said in its statement.

The bank noted that the risk of high inflation taking hold has increased recently, indicating that it will use its tools to bring inflation back to target.