Bank of Canada raises benchmark interest rate to one percent

Earlier, Bank of India hiked the interest rate in July which was the first time in sever years of time.

After the latest hike, the rate has reached to the point where it was in 2015 after which rates were reduced to boost the Canadian economy following oil price crash.

Finance Minister Bill Morneau told reporters as quoted by CBC news, the bank is "responding to what is a very positive set of economic indicators."

"We've had the fastest growth over the last year that we've had in a decade. We've had more job growth than was expected. These are all very positive indicators ... and the Bank of Canada's saying that when that happens, they had the opportunity to slightly raise rates," Morneau was quoted by CBC News.

"That's what we should expect when the economy is doing well," the finance minister added.

Following the hike in interest rate on Wednesday, Canadian dollar has increased more than a penny.

Exactly a week ago, Canadian economy reported the country has seen the best first quarter of the calendar year.

"The global economic expansion is becoming more synchronous, as anticipated in July, with stronger-than-expected indicators of growth, including higher industrial commodity prices. However, significant geopolitical risks and uncertainties around international trade and fiscal policies remain, leading to a weaker US dollar against many major currencies. In this context, the Canadian dollar has appreciated, also reflecting the relative strength of Canada’s economy" the bank said.

The bank was quoted by CBC News: "Recent economic data have been stronger than expected, supporting the bank's view that growth in Canada is becoming more broadly-based and self-sustaining."

"The level of GDP is now higher than the bank had expected."

(Reporting by Suman Das)