Canada Holds Interest Rate Amid Ongoing Global Uncertainty
The Bank of Canada held its benchmark interest rate at 2.25% on Wednesday, citing ongoing uncertainty from the Middle East conflict and US trade policy.
Despite the heightened volatility in global markets, the bank's April outlook assumes that tariffs remain unchanged and the global benchmark price of oil declines to $75 per barrel by mid-2027.
The Iran war has led to sharply higher energy prices, diminishing growth prospects in oil-importing countries and boosting inflation worldwide. In Canada, GDP growth is forecast to be 1.2% in 2026, rising to 1.6% in 2027 and 1.7% in 2028.
The bank's decision to maintain the policy rate at 2.25% takes into account the current projection and the impact of the conflict on inflation. The bank is closely monitoring the situation and stands ready to respond as needed to maintain price stability.