Canada's September Inflation Rate Hits Highest in 18 Years... Quantitative Easing Scale Likely to Shrink Further

[Photo by Xinhua News Agency]

[Asia Economy Reporter Byunghee Park] Canada's inflation rate in September reached 4.4%, the highest since February 2003, Bloomberg reported on the 20th (local time).

This exceeded Bloomberg's forecast of 4.3% and has been outside the central bank's monetary policy target range (1-3%) for six consecutive months.

Price increases were notable in the transportation sector, with gasoline prices rising 33% compared to a year ago and new car prices increasing by 7.2%. Additionally, housing prices rose 4.8%, food prices increased by 3.9%, and all eight major items surveyed showed price increases.

The central bank is scheduled to hold a monetary policy meeting on the 27th.

The benchmark interest rate is expected to remain unchanged, while the scale of quantitative easing is likely to be reduced. Bloomberg expects the Bank of Canada to cut its weekly asset purchases from 2 billion Canadian dollars to 1 billion Canadian dollars.

There is also speculation that the inflation rate forecast may be revised upward. The inflation rate for the third quarter recorded 4.1%, exceeding the central bank's forecast of 3.9%.

Tiff Macklem, Governor of the Bank of Canada, recently stated that the high inflation situation may persist longer than expected.

Currently, traders in the market expect the Bank of Canada to raise the benchmark interest rate by 0.25 percentage points three times by the end of next year. The current benchmark rate of 0.25% is expected to rise to 1% by the end of next year.

This content was produced with the assistance of AI translation services.