The Bank of Canada kept its target overnight interest rate unchanged at 2.25%, as expected, for the sixth consecutive meeting, announced earlier today, Wednesday, July 15. The bank also maintained the interest rate on banks at 2.50% and the interest rate on deposits at 2.20%.

The bank’s report stated that the Canadian economy is showing signs of improvement and growth is picking up, and that inflation is expected to gradually decline after its recent rise, despite risks and uncertainties related to the conflict in the Middle East.

The economic outlook has been affected since the release of the monetary policy report in April by rising oil prices, and the path of global inflation depends on how the conflict unfolds. Inflation rose to 3.2% in May due to higher gasoline prices, while core inflation, which excludes gasoline prices, reached 2.2%. Inflation indicators remained close to 2%, and it is expected to gradually return to the target by early 2027.

Under these circumstances, the Bank believes that the current interest rate remains appropriate to support the economic recovery and bring inflation back to the 2% target, consistent with its monetary policy outlook. The Bank is prepared to adjust monetary policy as needed and is committed to ensuring that Canadians maintain confidence in price stability during this period of global uncertainty.