The Bank of Canada kept its target overnight interest rate unchanged at 2.25%, as expected, for the second consecutive meeting after three consecutive rate cuts. It also maintained the key interest rate for banks at 2.50% and the deposit rate at 2.20%.

The Bank’s report stated that there were little change in the outlook for the global and Canadian economies compared to its October monetary policy report, but that these outlooks remain vulnerable to fluctuations in US trade policies and geopolitical risks.

The recent weakness of the US dollar has weighed on the Canadian dollar, while US trade restrictions and uncertainty continue to hinder Canadian economic growth. GDP growth is expected to stall in the fourth quarter, and unemployment remains high at 6.8%, although some companies are planning to hire more workers.

Inflation rose to 2.4% in September, according to the report, while the Bank’s preferred core inflation rate fell from 3% to 2.5% and is expected to remain close to the Bank’s 2% target. If inflation and overall economic activity develop in line with today’s expectations, the Bank believes the current interest rate is appropriate to keep inflation close to 2%. Should expectations change, the Bank is prepared to respond. The Bank will focus on ensuring Canadians’ confidence in price stability during this period of global turmoil and supporting economic growth while keeping inflation under control.

Markets are awaiting the Bank’s press conference in less than an hour.