Bank of Canada Governor Tiff Macklem said monetary policy can’t solve housing shortages that are driving up costs, suggesting that policymakers may consider looking beyond shelter inflation as they weigh how long to keep interest rates at current levels, Bloomberg News reported. In his first speech since holding the policy rate at 5% for a fourth consecutive meeting, Macklem said high shelter inflation — now the biggest contributor to above-target price gains — partly reflects the impact of rate increases on mortgage interest costs.

Business insolvencies jumped by more than 41 per cent in 2023, according to data released on Friday by Canada's top financial regulator, CBC.ca reported. The report from the Office of the Superintendent of Bankruptcy showed that the total number of insolvencies — meaning those filed by both businesses and consumers — was up by 23.6 per cent last year.

Bank of Canada Governor Tiff Macklem said that heightened demand for bonds is a cause of ongoing liquidity issues in the country’s funding markets, Bloomberg News reported. The Canadian Overnight Repo Rate Average, or Corra, has been stuck above the Bank of Canada’s overnight-rate target for weeks, spurring the central bank to intervene with a series of repo operations. On Wednesday, that spread widened to 7 basis points.

James and Nicki Malcolm moved to El Salvador from New Zealand to be part of a bitcoin dream sold by President Nayib Bukele in 2021 when he made the Central American nation the first in the world to accept the cryptocurrency as legal tender, Reuters reported. Months later Bukele sketched his plans for Bitcoin City, a tax-free crypto haven powered by geothermal energy from a volcano, to a sea of enthusiasts at a beach club presentation that included an avatar of himself on a spaceship.

Thousands of Canadian small businesses face the risk of bankruptcy after the government ended pandemic-era support last month with the economy slowing at a time of high interest rates, Reuters reported. Small firms that employ fewer than 100 people are critical to the Canadian economy as they give jobs to almost two-thirds of the country's 12 million private workers. A spike in bankruptcies, which jumped 38% in the first 11 months of 2023, would weigh on economic growth, lobby groups and economists warn.

Small, loosely-regulated lenders in Canada who rode a pandemic housing boom to offer mortgages at high interest rates are now showing signs of stress as a spike in living costs pushes some homeowners toward a default, Reuters reported. Canada's C$2 trillion ($1.5 trillion) mortgage market is dominated by the "Big Six" major banks that include Royal Bank of Canada and TD Bank.

A former member of the Bank of Canada’s governing body says that he believes the central bank will start cutting interest rates in about six months if inflation pressures ease as expected, Bloomberg News reported. Policymakers will wait until they see underlying price pressures cool, even if the economy has entered a period of excess supply, former Deputy Governor Paul Beaudry said. “I wouldn’t see the potential of rate cuts until probably the July decision,” Beaudry said in an interview with Avery Shenfeld, the chief economist at Canadian Imperial Bank of Commerce.

The Canadian economy bounced back sharply in the final quarter of 2023, driven by higher goods production and shipments and stronger U.S. demand, Bloomberg News reported. Preliminary estimates say gross domestic product grew 0.3% in December, Statistics Canada reported Wednesday in Ottawa. That followed a 0.2% expansion in the previous month, exceeding forecasts for 0.1% in a Bloomberg survey of economists. Overall, the industry-based numbers point to growth of 1.2% on an annualized basis in the final three months last year, reversing a third-quarter contraction.

Mexican lender Unifin has concluded its bankruptcy proceedings, the company said in a filing on Monday, following the approval of its plan to restructure debts by a local court, Reuters reported. Unifin's business model focuses on offering specialized financing to companies, as well as car loans. In 2022, a court approved Unifin's voluntary application for declaration of bankruptcy, a move the firm said would help it protect assets and hold talks with creditors. The lender's last published quarterly results from the second quarter of 2022 showed financial liabilities of around $4 billion.

Mexico’s economy slowed more than forecast in the fourth quarter on waning exports and household consumption, fueling bets the nation’s central bank will start interest rate cuts in coming months, Bloomberg News reported. Gross domestic product expanded 0.1% on a quarterly basis, less than the 0.3% median estimate of economists surveyed by Bloomberg. From a year earlier, it grew 2.4%, below the 3% median forecast, according to preliminary data released Tuesday by Mexico’s national statistics institute. For for the full year of 2023, Mexico’s economy expanded 3.1%.