Julie Gordon, David Ljunggren

OTTAWA (Reuters). -The Bank of Canada has a primary goal to bring down inflation and is willing to increase rates to accomplish this, a deputy governor stated on Friday.

Sharon Kozicki made her first speech in the governing council’s new year. She also stated that the speed and extent of interest rate rises, as well as the beginning of quantitative tightening would all be discussed during the April meeting of the central bank.

Kozicki stated that “inflation in Canada has reached a high point, the labor market is tight, and there is considerable demand,” via webcast to Federal Reserve Bank of San Francisco.

It’s crucial to make it clear that returning inflation below 2% is our top priority and our unwavering commitment. She stated that we have already taken and will continue taking action to bring inflation back to the target and are ready to take forceful actions.”

Kozicki spoke in line with statements made by Governor Tiff Maklem earlier in this month. He said that the bank could take aggressive steps to reduce spiking rates.

Canada’s inflation rate reached 5.7% in February. This is expected to increase. The Bank of Canada raised its policy rate by 0.5% to 0.5% in February, an increase of 0.25%. This is the Bank’s first hike in three years.

The central bank is expected to raise interest rates another 200 basis points this fiscal year, according to the money market. [BOCWATCH]

Kozicki stated that although Canadian households are in better financial health now than they were at 2017/18’s start of the BoC tightening campaign, the BoC still sees indebtedness as a major domestic risk.

She stated that “high indebtedness may increase the effects of rising interest rate and it might also make it worsen the shock of the future.”

“We will monitor the developments regarding households closely as our work progresses,” she said.

Canadian Dollar traded 0.4% lower at 1.2482 USD to greenback. This is its highest point since Jan. 20.