Bank of Canada leaves rates unchanged amid US trade policy risks

The Bank of Canada decided to maintain its policy rate at 2.75% while awaiting further information on the impact of US trade policy. When making this decision, the regulator considered steady inflation growth and the economy's relative stability in the first quarter.

Bank of Canada Governor Tiff Macklem noted the possibility of lowering rates should economic indicators deteriorate. He stated that the trade conflict with the US remains the main risk to the Canadian economy. High tariffs are already negatively affecting the export sector and creating additional difficulties for businesses, as reported by Bloomberg. The news agency says that this is starting to impact companies' investment decisions and domestic consumer activity.

Bloomberg economist Stuart Paul predicts a possible rate cut as early as the third quarter amid slowing economic growth. He believes that the consequences of the tariff increase have not yet been fully seen in price growth.

In light of the central bank's statements, the Canadian dollar strengthened against the greenback.