Financial News: Bank Of Canada Leaves Interest Rates Unchanged Amid

Bank Of Canada Leaves Interest Rates Unchanged Amid Tariff Uncertainty

04/16/2025 - 09:57:00 (RTTNews)

(RTTNews) - Following a series of interest rate cuts over the past several months, the Bank of Canada on Wednesday announced its widely expected decision to leave interest rates unchanged.

The Bank of Canada said it decided to maintain its target for the overnight rate at 2.75 percent, with the Bank Rate at 3 percent and the deposit rate at 2.70 percent.

The accompanying statement noted increased uncertainty due to the major shift in direction of U.S. trade policy and the unpredictability of tariffs makes it unusually challenging to project GDP growth and inflation in Canada and globally.

The Bank of Canada said its April Monetary Policy Report subsequently presents two scenarios that explore different paths for U.S. trade policy.

"In the first scenario, uncertainty is high but tariffs are limited in scope. Canadian growth weakens temporarily and inflation remains around the 2% target," the Bank of Canada said.

"In the second scenario, a protracted trade war causes Canada's economy to fall into recession this year and inflation rises temporarily above 3% next year," the Canadian central bank added, noting, "Many other trade policy scenarios are possible."

The Bank of Canada said its Governing Council will proceed carefully, with particular attention to the risks and uncertainties facing the Canadian economy.

The risks and uncertainties include the "extent to which higher tariffs reduce demand for Canadian exports; how much this spills over into business investment, employment and household spending; how much and how quickly cost increases are passed on to consumer prices; and how inflation expectations evolve," the bank said.

The Bank of Canada concluded its statement by noting, "Monetary policy cannot resolve trade uncertainty or offset the impacts of a trade war. What it can and must do is maintain price stability for Canadians."

For comments and feedback: contact editorial@rttnews.com

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS

Australia Rate Decision Due On Tuesday (03 hr(s), 02 min(s), 53 sec(s) ago)
(RTTNews) - The Reserve Bank of Australia will wrap up its monetary policy meeting on Tuesday and ...Full Story»

U.S. Leading Economic Index Slumps More Than Expected In April (10 hr(s), 51 min(s), 53 sec(s) ago)
(RTTNews) - The Conference Board released a report on Monday showing its reading on leading U.S. e ...Full Story»

Eurozone Growth Outlook Downgraded; Disinflation To Proceed More Swiftly: EU (11 hr(s), 59 min(s), 53 sec(s) ago)
(RTTNews) - Eurozone economic growth outlook was downgraded substantially for 2025 due to the impa ...Full Story»

Malta HICP Inflation Rises To 2.6% (12 hr(s), 34 min(s), 53 sec(s) ago)
(RTTNews) - Malta's EU measure of inflation accelerated further in April to the highest level ...Full Story»

Eurozone Inflation Steady At 2.2% (15 hr(s), 24 min(s), 53 sec(s) ago)
(RTTNews) - Eurozone consumer prices logged a steady growth in April, final data from Eurostat sho ...Full Story»

Spain Trade Gap Widens In March (15 hr(s), 54 min(s), 53 sec(s) ago)
(RTTNews) - Spain's foreign trade deficit increased notably in March from a year ago, as impor ...Full Story»

Slovakia HICP Inflation Eases To 3.9% (16 hr(s), 45 min(s), 53 sec(s) ago)
(RTTNews) - Slovakia's EU measure of inflation eased in April to the lowest level in four mont ...Full Story»

Austria Inflation Confirmed At 3.1% (17 hr(s), 16 min(s), 53 sec(s) ago)
(RTTNews) - Austria's consumer price inflation rose slightly as initially estimated in April, ...Full Story»