Bank of Canada Keeps Interest Rate at 2.25% Amid Global Economic Pressures

The Bank of Canada has decided to keep its key interest rate at 2.25% due to increasing economic pressures from global conflict, rising energy costs, and new U.S. tariffs.

Bank Governor Tiff Macklem stated that the governing council reviewed recent data and the implications for monetary policy before making the decision to leave the rate unchanged.

The conflict in the Middle East has contributed to high oil prices, while new U.S. tariffs are affecting Canadian exporters. The Bank estimates that affected products represent about 5% of Canadian exports to the United States.

Macklem mentioned that federal support programs will likely soften the impact for hard-hit businesses and workers, but highlighted the risk of further action by the U.S. posing a threat to the sustainability of Canada's recovery.