English
BoC considers keeping interest rates unchanged, governor tells Reuters
In an interview, the Governor of the Bank of Canada mentioned that the central bank is considering maintaining the current interest rate unchanged.
The Bank of Canada (BOC) considered keeping its key policy rate at 3% ahead of its interest rate announcement on Wednesday, but ultimately decided a seventh straight rate cut was needed, Bank of Canada Governor Tiff Macklem said in an interview.
The central bank cut its key policy rate by 25 basis points to 2.75% and expressed concern about inflationary pressures and slowing growth due to trade uncertainty and President Trump’s tariffs.
"We did discuss the option of maintaining 3% and going down to 2.75%, and the rationale for maintaining 3% was that the economy was growing stronger than we had expected," Macklem said.
Given the uncertainty about the direction of U.S. trade and tariff policy, "one approach is, why don't we wait until things become a little clearer?" he added.
He said the central bank decided to cut rates because surveys showed the tariff threat had shaken consumer and business confidence, which would have a significant impact on domestic demand, while also noting that higher tariffs would cut foreign demand.
"So, against this backdrop, and the fact that inflation is close to 2%, the Governing Council is convinced that the most appropriate course of action is to cut the policy rate by 25 basis points," he said.
Bonus rebate to help investors grow in the trading world!
