Bank of Canada Keeps Interest Rate Steady Amid Global Economic Pressures

The Bank of Canada has decided to maintain its key interest rate at 2.25% amidst growing economic pressures from global conflict, rising energy costs, and new US tariffs.

Bank Governor Tiff Macklem stated that the governing council reviewed recent data, risks to the outlook, and implications for monetary policy before deciding to leave the rate unchanged.

The ongoing conflict in the Middle East is causing oil prices to remain high, while the newly imposed US tariffs are weighing on Canadian exporters. The Bank said that Canada's economy strengthened in the second quarter with GDP rising 3.3% after weak growth earlier in the year.

Macklem noted that new US tariffs pose risks to the sustainability of the recovery, but they won't have a large direct impact on overall economic activity in Canada. The affected products represent about 5% of Canadian exports to the United States and federal support programs will likely soften the impact for hard-hit businesses and workers.