Reducing interest rates in Canada and alerting the new crisis
reports Mehr News Agency announced the Central Bank of Canada. Kurdish; Because it should evaluate both the impact of higher costs on inflation and the decline in demand. Some economists believe that this position is a sign of a halt to lower interest rates.
Tiff Canadian Central Bank Chairman said in a news conference that the institution was trying to raise pressure. The goal is to maintain prices. He also refused to provide a specific forecast for the future of interest rates.
Maclalam warned that the Canadian economy has faced a new crisis.
Donald Trump’s variable tariffs on Canadian goods have raised concerns for companies, reduced consumer confidence and a drop in investment. Trump imposed a 5 % tariff on all steel and aluminum products on Wednesday, and Canada will impose a $ 1.2 billion Canadian tariff on US goods on Thursday. The central bank said that the continuation of the tariff war could lead to poor economic growth and rise in prices, which make it difficult to decide on raising or lowering interest rates.
Inflation growth and impact on currency market
With concerns about import costs, inflation is expected to reach 4.9 percent in March, while in January it was 4.9 percent. Meanwhile, the value of the Canadian dollar rose by 4.9 percent after the central bank’s decision to reach a rate of 1.2 against the US dollar. Financial markets have estimated the likelihood of a reduction in interest rates on April 1, 5 %.
Reduce internal demand and economic concerns
The US is Canada’s largest trading partner, with 5 % of Canada’s exports to the country. A business and household poll shows that concern about job security, especially in the US -related sectors, has increased.
Companies have reduced their sales prediction and some have been in trouble for financial credit. Also, the weakness of the Canadian dollar has increased the cost of imports, thus reducing their employment and investment programs.
McLlam has emphasized that monetary policies cannot offset the effects of a trade war, but should prevent rising prices into a sustainable inflation.
