The Bank of Canada (Central Bank) announced on 2 local time that it will maintain the benchmark interest rate at 2.25 percent unchanged. Canada has maintained the benchmark interest rate unchanged since the end of October 2025.
The Bank of Canada said in a press release that day that Canada‘s economy has recovered in the second quarter but faces high uncertainty. New tariffs from the United States and threats of further tariff actions pose risks to the sustainability of Canada‘s economic recovery.
The Bank of Canada said the risk of inflation rising increased due to the continuing conflict in the Middle East and the minimal progress in reopening the Strait of Hormuz. The longer oil prices remain high, the greater the risk that prices will spread to other goods and services.
The Bank of Canada expects that the new U.S. tariffs and Canada‘s retaliatory tariffs will also push up costs for some companies and may affect consumer prices over time.