The Bank of Canada on Wednesday held its key lending rate at 2.25 per cent, maintaining monetary stability even as American tariffs continue to weigh on the country’s export-dependent economy.
Officials said the Canada interest rate decision reflects resilience in several sectors despite heightened trade uncertainty.
According to the central bank, the Canadian economy rebounded in the third quarter, recording 2.6 per cent growth, while employment rose for a third consecutive month in November. However, it warned that GDP growth is expected to weaken in the fourth quarter due to a projected drop in net exports.
Recent tariffs imposed by US President Donald Trump, ranging from 25 to 50 per cent on key Canadian exports such as steel, cars and lumber, have disrupted trade flows and increased volatility. Ottawa noted that although the economy is holding up, the situation remains unpredictable.
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Governor Tiff Macklem said the Bank of Canada is ready to respond if conditions deteriorate, citing ongoing concerns about how industries will adjust to higher tariffs. He added that inflation may see short-term fluctuations before stabilising near the 2.0 per cent target.
Despite the pressure of US trade actions, policymakers maintained that the Canada interest rate would remain unchanged for now, with the next announcement scheduled for January 28.
Officials reiterated that large swings in trade could continue in coming months, but the central bank expects growth to pick up in 2026. For Canadians, the stability of the Canada interest rate signals cautious optimism amid a turbulent global environment.