Interest rates unlikely to return to low levels: Bank of Canada

The Bank of Canada has warned that interest rates are unlikely to return to the low levels seen over the past 15 years.

Central Bank Senior Deputy Governor Carolyn Rogers told a news conference in Vancouver that the era of very low interest rates is over and Canadians will have to adapt to a higher interest rate environment.

She said that people across the world are facing high interest rates.

The Senior Deputy Governor said that geopolitical risks such as the Ukraine war and the Israel-Gaza war affect energy prices and supply chains in a way that could lead to higher inflation and further interest rate hikes.

Notably, the central bank's key policy rate was only 0.25 percent during the pandemic years, which currently stands at a 22-year high of 5 percent.

The Bank of Canada has hiked interest rates ten times from March 2022 to July 2023 to tackle inflation.

The bank left rates on hold last month but said they could rise again if needed.