Bank of Canada Governor Tiff Macklem reiterated the central bank’s commitment to hiking interest rates in order to get inflation under control.

“We've signalled very clearly that we expect rates will need to rise further,” Macklem said at a press conference on Wednesday.

“And that could mean another bigger than normal increase, it could mean that we can move to a more normal size, 25-basis-point increases.”

The Bank of Canada hiked interest rates for the sixth-straight time on Wednesday.

The central bank increased its benchmark overnight lending rate by 50 basis points to 3.75 per cent, which was less than the 75-basis-point hike expected by the majority of economists.



Macklem added that Bank of Canada officials have been “very clear on the things we're watching, as we take those (interest rate) decisions.”

“It's going to depend on how the effects of higher interest rates are feeding through the slowing demand,” he said.

“It's going to depend on what we see in inflation expectations, and to some extent, clearly, inflation is going to be affected by international developments and how those global supply chains disruptions resolved.

Last week, Statistics Canada reported the consumer price index was up 6.9 per cent in September from a year ago, which was higher than average prediction from economists of a 6.7 per cent gain.



When asked about the central bank’s credibility, Macklem said they “have a very clear mandate, we're committed to achieving our mandate.”

“We are trying to balance the risk on both sides, we don't want to under tighten,” he said.

“Inflation is not going to fade away by itself and if we ignore the problem, if we're half-hearted in our response, Canadians will have to continue enduring high inflation, they'll have to continue to cope with the anxiety of high inflation. Nobody wants that.”

The central bank’s credibility has been brought into question by politicians such as Conservative Party of Canada Leader Pierre Poilievre and New Democratic Party Leader Jagmeet Singh.

The International Monetary Fund also called out the Bank of Canada for its transparency practices, as the central bank previously did not publish minutes like the U.S. Federal Reserve.

In September, the Bank of Canada said it would begin publishing minute-like summaries of deliberations after each policy decision in order to improve transparency.

Macklem said the bank is very conscious of the situation it is facing and is focused on its strategy to get inflation back to manageable levels.

“We're also very conscious though that if we overtighten, the economy will slow more than is needed, that'll make life more difficult for Canadians than it’s needed and we'll undershoot our inflation target, so we don't want to do that either,” he said.

“Look, these are these are difficult decisions. I will say that the independence of central bank becomes more important when the decisions are difficult.”

The Bank of Canada’s last interest rate announcement for 2022 is scheduled for Dec. 7.