Geoffrey Smith 

Investing.com – The Bank of Canada has increased its key rate to 1.0% by 50 basis point and announced it will start the process of quantitative tightening’ from April 25. 

This is the second move by a central bank of advanced economies to raise 50 basis points on Wednesday. It comes just hours after the Reserve Bank of New Zealand made the same decision – the largest rate increase in its 22 year history. 

In its policy statement, the BoC stated that the outlook for Canadian inflation has seen a substantial upward revision. This was attributed to price spikes in oil and other commodities and supply disruptions caused by the conflict in Ukraine.

After the news broke, the Canadian dollar rose to C$1.2650, which reversed previous losses. The Canadian dollar was effectively unaffected by the events.  Since April 1, the Canadian dollar had fallen more than a penny against the greenback as markets priced in an earlier tightening by the U.S. Federal Reserve.