Ottawa: Economists believe that the Bank of Canada is unlikely to change its current interest rates as it assesses the impact of US tariffs on the Canadian economy. After a quarter-point cut in March, the Bank of Canada kept interest rates steady at 2.75% in April and June.
Given the increase in employment opportunities and stable inflation, it is expected that the current rates will be maintained in the next interest rate announcement on July 30. While there are arguments that further rate cuts would help the economy in a trade war, some institutions like the Royal Bank of Canada (RBC) argue that further cuts are not currently needed. They also point out that interest rate reductions may not be effective for some weaker economic sectors.
Over the past year, the Bank of Canada has cut interest rates by 2.25%. Reports suggest that this support is now beginning to be evident in the economy. Although Canada is believed to be in a recession, Oxford Economics predicts that the central bank will not cut rates further due to rising inflation. However, some institutions like BMO believe that further rate cuts are possible.
