Bank of Canada Keeps Policy Interest Rate Unchanged

(MENAFN) The Bank of Canada maintained its benchmark interest rate at 2.25 percent Wednesday, as officials navigate mounting uncertainty from American trade barriers.

Bank of Canada Governor Tiff Macklem told reporters the nation's economy faces adaptation pressures stemming from U.S. protectionist measures during a Wednesday briefing.

Companies are restructuring logistics networks and pursuing alternative export destinations, Macklem noted, emphasizing that expanded trade partnerships and strengthened domestic commerce will bolster Canada's productivity rebound.

"Geopolitical risks are elevated and the upcoming review of the Canada-United States-Mexico Agreement is an important risk," said Macklem.

According to a central bank statement released Wednesday, American trade barriers and ongoing unpredictability continue hampering Canadian economic expansion. Officials forecast average annual GDP growth reaching 1.1 percent in 2026 and 1.5 percent in 2027, figures consistent with October's estimates.

The institution observed that the inflation rate for 2025 was 2.1 percent and is expected to stay close to the 2 percent target over the projection period, with trade-related cost pressures offset by excess supply.

Throughout the previous year, the Bank of Canada issued eight rate decisions, reducing its policy rate by 25 basis points in January, March, September and October respectively, while keeping rates steady in April, June, July and December.

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