The Bank of Canada (the central bank) announced on the 2nd (local time) that it would keep its benchmark interest rate unchanged at 2.25 percent. Canada has kept its benchmark interest rate unchanged since late October 2025.
In a press release issued that day, the Bank of Canada stated that the Canadian economy recovered in the second quarter but faces high levels of uncertainty. New U.S. tariffs and the threat of further tariff actions pose risks to the sustainability of Canada’s economic recovery.
The Bank of Canada noted that upward risks to inflation have increased as the conflict in the Middle East persists and little progress has been made toward reopening the Strait of Hormuz. The longer oil prices remain high, the greater the risk that these prices will be passed on to other goods and services.
The Bank of Canada expects that new U.S. tariffs and Canada’s retaliatory tariffs will also push up costs for some businesses and may affect consumer prices over time.
Translated with DeepL.com (free version)