Global Markets: BoC raises key interest rate to 2.5 per cent

WINNIPEG – The following is a glance at the news moving markets in Canada and globally.

– The Bank of Canada (BoC) took a more hawkish stance than expected when it rose its key interest rate by a full point to 2.5 per cent on Wednesday. The hike exceeded the 0.75 of a point many analysts predicted and it represents the largest increase by the central bank since August 1998. “With the economy clearly in excess demand, inflation high and broadening, and more businesses and consumers expecting high inflation to persist for longer, the Governing Council decided to front-load the path to higher interest rates,” BoC officials said in the policy statement. As a result, prime lending rates were increased to 4.70 per cent at five of Canada’s major banks: Royal Bank of Canada; Canadian Imperial Bank of Commerce; Bank of Montreal; TD Bank; and Scotiabank.

– Russian missile strikes killed at least five people in the southern Ukrainian city of Mykolaiv on Wednesday, according to Ukrainian authorities. Russian missiles also struck the city of Zaporizhzhia in what many believe is an attempt by Russia to hold on to gains in eastern Ukraine. The Ukrainian military, meanwhile, is trying to reclaim the city of Nova Kakhovka, east of the Black Sea port of Kherson.

– Mandatory random COVID-19 testing for fully-vaccinated travellers arriving in Canada will resume next week at four major airports, the Canadian government announced on Thursday. Travellers arriving in Toronto, Montreal, Calgary and Vancouver would be taken to an off-site location for their tests. Testing was previously suspended due to long waits at airports, but the government maintains that testing is needed to detect newer COVID-19 variants.