In Canada, inflation is too high, therefore the Bank of Canada has to raise interest rates to limit spending and allow the economy time to catch up, Governor Tiff Macklem said in a video broadcast on Twitter by the central bank on Monday.

“Inflation is too high,” Macklem stated in a #AskTheBoC video, repeating comments made earlier this month after the central bank raised its policy rate by 75 basis points to 3.25%.

“It is critical that we get inflation back down so that Canadians can plan their spending and savings and are not caught off guard by large swings in their cost of living.”

The Bank of Canada, like many of its global peers, is rapidly increasing interest rates in response to inflation running at levels not seen in decades.

But the bank has faced public criticism for increasing borrowing costs at a time when many Canadians are already struggling to afford groceries and other essentials.

“It is by raising interest rates that we’re going to slow spending in the economy, give the economy time to catch up and take the steam out of inflation,” Macklem said in the video. “That’s gonna get inflation back down.”

The central bank has lifted rates by 300 basis points in just six months as it looks to wrangle inflation back to the 2% target. Canada’s inflation rate edged down to 7.0% in August from 8.1% in June and 7.6% in July.

The Canadian dollar weakened to its lowest level since May 2020 at 1.3808 to the greenback, or 72.42 U.S. cents, before clawing back some of its decline, along with broad-based volatility in currency markets.