The policymakers of the Bank of Canada have stated that they are still prepared to further increase their benchmark interest rate, even after raising rates to their highest level in 22 years earlier this month.
The central bank has just released the minutes of the deliberations regarding the interest rate decision made on July 12, in which the policy rate was raised by 25 basis points to 5.0 percent.
The July increase by the Bank of Canada followed another quarter-point increase made in June.
After the July 12 decision, there was a debate among economists about whether the latest rate hike was truly necessary as inflation fell within the central bank's target range of one to three percent. The bank justified the decision based on the persistence of high underlying inflation.
In the preliminary discussions on the continuation of the interest rate policy, policymakers have chosen to base future decisions on indicators observed meeting after meeting.
"They agreed that they were prepared to further increase the policy rate if inflationary pressures do not subside as projected, and progress toward the (two percent) target stalls," reads the deliberations. "But we don't want to do more than necessary."