The Bank of Canada is shown in Ottawa on Tuesday, July 12, 2022. THE CANADIAN PRESS/Sean Kilpatrick
OTTAWA – The Bank of Canada lost $522 million in the third quarter of this year, marking the first loss in its 87-year history.
In the central bank’s latest quarterly financial report, it says revenue from interest on its assets did not keep pace with interest charges on deposits at the bank, which have grown amid rapidly rising interest rates.
The Bank of Canada’s aggressive interest rate hikes this year have raised the cost of interest charges it pays on settlement balances deposited in the accounts of big banks.
That’s while the income the central bank receives from government bonds it holds remains fixed.
While testifying before the House of Commons finance committee last week, Bank of Canada governor Tiff Macklem addressed the expected losses.
Macklem said the losses don’t affect the central bank’s ability to conduct monetary policy.
This report by The Canadian Press was first published Nov. 29, 2022.
