Bank of Canada Holds Key Rate Steady Amid Trade Uncertainty

The Bank of Canada kept its key interest rate unchanged at 2.25 per cent for the seventh consecutive time, as expected by economists.

The move was made despite uncertainty in global markets due to new US tariffs and the ongoing war in Iran, which has increased inflationary risks according to Governor Tiff Macklem.

Macklem stated that the central bank cannot offset the effects of tariffs or influence global energy prices, but can ensure that global developments do not jeopardize price stability in Canada.

The economy is showing signs of rebounding after stagnating for much of last year, with 3.3 per cent annualized growth in the second quarter.