Bank of Canada posts historic loss of $522 million in Q3
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 interest income on its assets has not kept pace with interest charges on deposits at the bank, which have risen amid rapidly rising interest rates.
The Bank of Canada’s aggressive interest rate hikes this year have increased the cost of interest charges it pays on settlement balances deposited in the accounts of major banks.
This is when the income the central bank receives from the government bonds it holds remains fixed.
During his testimony before the House of Commons Finance Committee last week, Bank of Canada Governor Tiff Macklem discussed the expected losses.
Macklem said the losses do not affect the central bank’s ability to conduct monetary policy.
This report from The Canadian Press was first published on November 29, 2022.