Bank of Canada Holds Rates Steady Amid Geopolitical Uncertainty

The Bank of Canada has kept its key interest rate steady at 2.25 per cent, citing ongoing geopolitical tensions as the reason for its decision.

This marks the third time this year that the bank has held off on adjusting rates, with the last change occurring in October 2025.

The bank pointed to several factors contributing to its decision, including the war in Iran, which continues to drive up energy prices, as well as new American tariffs on Canadian goods and the breakdown of trade talks between the two countries.

Despite these challenges, the bank noted that Canadian economic activity has been strengthening, with real Gross Domestic Product growing by 3.3 per cent in the second quarter, following weak growth in the first.