Bank of Canada says high inflation ‘keeps us up at night’

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OTTAWA, June 22 (Reuters) – Bank of Canada Senior Deputy Governor Carolyn Rogers said on Wednesday that inflation in Canada was far too high and did not rule out a 75 basis point increase during the central bank’s decision in July.

“We know inflation is keeping Canadians up at night. It’s keeping us up at night,” Rogers said at an event hosted by the Globe and Mail newspaper, just hours after official data showed May’s inflation rate hit a nearly 40-year high of 7.7. %. Read more

“The balance of risk is very upside on inflation. So right now the way we look at it is that the most important thing is to get inflation back on target.” , she added.

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When asked if that meant a 75 basis point hike in its next move scheduled for July 13, Rogers didn’t rule out the possibility.

“We will make the July decision when we get to July,” she said. “We have always been clear, the economy is in excess demand, inflation is too high, rates need to rise.”

The Canadian dollar was trading down 0.1% at 1.2930 against the greenback, or 77.34 cents US, recouping some earlier losses.

The Bank of Canada raised its key rate to 1.5% from 1.0% earlier this month, its second consecutive oversized increase, and said it would act “more forcefully” if needed to rein in price increases.

Money markets see about an 80% chance of a 75 basis point increase in July and economists said May’s surprisingly high inflation number made such a move increasingly likely.

The central bank said separately that Deputy Governor Timothy Lane would retire on September 16, following rate decisions in July and September. The process to find a replacement will begin immediately, the bank said.

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Reporting by David Ljunggren and Julie Gordon, editing by Deepa Babington

Our standards: The Thomson Reuters Trust Principles.

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