Bank of Canada raises interest rates by 25 basis points

By Ovunc Kutlu

ISTANBUL (AA) - The Bank of Canada hiked interest rates Wednesday by 25 basis points, as the central bank continues its policy of quantitative tightening.

The target for the overnight rate has been increased to 4.75%, with the bank rate now at 5% and the deposit rate climbing to 4.75%.

"Globally, consumer price inflation is coming down, largely reflecting lower energy prices compared to a year ago, but underlying inflation remains stubbornly high," the bank said in a statement.

"While economic growth around the world is softening in the face of higher interest rates, major central banks are signaling that interest rates may have to rise further to restore price stability," it added.

While the market expectation for the central bank was to hold the rates steady, the last time the Bank of Canada hiked rates was Jan. 25.