6 August
Canada’s central bank might lower interest rates if economic conditions deteriorate
As Bloomberg reports, the Canadian central bank is facing an obstacle in its efforts to lower interest rates in the form of persistent core inflation. However, financial regulatory officials note that borrowing costs could still be reduced if the domestic economy weakens further.
Earlier this month, the Bank of Canada left its key rate unchanged at 2.75%. At that time, policymakers considered reducing it by 25 basis points, according to the summary of deliberations published Tuesday.
Financial regulatory officials concluded that the likelihood of an escalation in global trade disputes caused by US tariff policy has weakened. Nevertheless, risks from American duties persist, continuing to pressure Canada’s economic growth and inflation as consumers adapt to shifting global trade dynamics.
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