Canada Bank maintains its key rate at 2.75%

The Bank of Canada announced on July 30 that it maintained the target funding rate one day to 2.75%.

The official discount rate remains rather at 3%, while the rate of remuneration for deposits is 2.70%.

The government body specifies that, although certain elements of the United States’s foreign trade policy has started to materialize in recent weeks, negotiations are constantly evolving, threats of new sectoral customs rights persist and American trade measures remain unpredictable.

In this context, the report on monetary policy of July does not present the usual reference projections for GDP growth and inflation in Canada and in the world. Furthermore, Rather. For example, it provides a scenario for maintaining customs duties based on duties in place or agreed on July 27, as well as two canada bank maintains its key other scenarios – a climbing scenario and a scenario of de -escalation of customs duties.

Globally – Canada bank maintains its key

Even if the American customs duties have led to a volatility of trade internationally, the global economy has been reasonably resilient.

In the United States, the rate of growth was modeled during the first half of 2025, but the labor market remained solid. Similarly, The inflation measured by the Consumer Price Index (IPC) increased slightly in June in the United States. Nevertheless, and some signs indicate that customs duties are starting to be passed on to these prices.

The economy of the euro zone has modestly progressed in the first half of the year.

In China, the drop in exports to the United States was largely offset by an increase in exports to the rest of the world.

canada bank maintains its key

World oil courses are near April levels, despite a certain volatility.

The global stock markets have set up and the rate differences in companies’ obligations have shrunk. The yields of long -term state bonds have increased. The Canadian dollar appreciated the US dollar, which has usually weakened.

In the scenario to maintain customs duties, global growth slows down modestly and is around 2.5% at the end of 2025, before returning around 3% in 2026 and 2027.

In Canada – Canada bank maintains its key

Here, American customs duties disrupt trade, but overall, the economy shows a certain resilience so far. Additionally, The bank expects GDP. which had displayed robust growth in the first quarter of 2025 due to exports preceded in anticipation of the entry into force of customs duties, fell by approximately 1.5% in the second quarter.

This contraction is mainly explained canada bank maintains its key by the marked slowdown in exports which followed the Devanance, but also by the drop in American demand for Canadian goods due to customs duties.

The growth in business and household expenditure is also hampered by uncertainty.

There has been a weakening of the conditions of the labor market in the sectors affected by foreign trade, but employment was maintained in the rest of the economy. The unemployment rate has rather increased gradually since the beginning of the year to reach 6.9% in June, and wage growth continued to moderate.

Taken as a whole, the indicators believe that the excess offer in the economy has increased since January.

In the scenario of maintaining customs duties, GDP growth would go up after being contracted in the second quarter and would reach approximately 1% during the second half of the year, under canada bank maintains its key the effect of exports that stabilize and household expenditure that gradually increases. In this scenario, excess capacities persist within the economy in 2026, then decrease as growth increased to establish almost 2% in 2027.

In the scenario of de -escalation, economic growth rebounds faster, while in the climbing scenario, the economy contracts until the end of this year.

Inflation

The inflation measured by the IPC was 1.9% in June, slightly increased to the previous month. Accession made of taxes, inflation increased to 2.5% in June, while it was around 2% during the second half of 2024. This increase is largely testified by an increase in the prices of non -energy goods.

The sharp increase in housing costs remains the factor that contributes most to overall inflation, but it continues to slow down. According to various indicators, the bank assesses that canada bank maintains its key underlying inflation is around 2.5%.

In the scenario of maintaining customs duties, overall inflation would remain almost 2% during the period referred to, upward and downward pressures on inflation more or less. However, risks surround this inflation scenario.

As the other two scenarios illustrate, lower customs duties would attenuate direct increases in inflation and higher customs duties would intensify these pressures.

In addition, many companies indicate that they must take on costs to find other suppliers and carve out a place on new markets. These costs could add to the upward pressures on consumer prices.

Statut where

In this context where uncertainty remains high, where the Canadian economy shows a certain resilience and where pressures on underlying inflation remain, the board of management has thus decided to leave the key rate unchanged.

This canada bank maintains its key will continue to analyze the evolution and strength of pressures on inflation-those down due to the weakening of the economy and those uphill arising from the rise in costs attributable to customs duties and the reorganization of trade.

If the weakening of the economy has weighing additional drop pressure on inflation and the upward pressures due to commercial disturbances were contained, a reduction in the key rate may be necessary.

The Council will be cautious, by paying particular attention to the risks and uncertainties with which the Canadian economy faces, in particular: to what extent the higher American customs duties make demand for Canadian exports; How it is an impact on business investments, employment and household expenditure; With what scale and how fast the cost increases arising from customs duties and commercial disturbances are passed on to consumer prices; And how are inflation canada bank maintains its key expectations evolve.

The next date of establishment of the target funding rate for a day will take place on September 17, 2025. Moreover, (N.P.)

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