Russia’s unprovoked attack of Ukraine in February also sent global energy and food prices sharply higher, which added considerably to inflation in Canada. We’ve been raising rates for almost a year now—from ¼% to 4½%. And we are seeing their impact.
Borrowing rates and the exchange rate  -4-  Increases in the policy rate have raised borrowing rates for households and businesses (Chart 1). The average five-year variable mortgage rate rose from 1.5% to 5.9% between January 2022 and January 2023, and the average fiveyear fixed mortgage rate rose from 2.8% to 5.1% over the same period.