Bank of Canada Keeps Policy Rate Unchanged at 2.75%
The Bank of Canada has left its overnight interest rate target at 2.75%. This marks the third consecutive meeting the Bank has kept rates on hold, in part due to ongoing U.S. trade policy negotiations and the threat of new sector-specific tariffs. Despite these challenges, the Bank noted that “In Canada, U.S. tariffs are disrupting trade, but overall, the economy is showing some resilience so far. After robust growth in the first quarter of 2025, driven by a pull-forward in exports to get ahead of tariffs, GDP likely declined by about 1.5% in the second quarter.”
“With uncertainty still elevated, the Canadian economy showing resilience, and ongoing pressures on underlying inflation, Governing Council decided to hold the policy interest rate unchanged,” the Bank’s announcement stated. “We remain focused on ensuring that Canadians continue to have confidence in price stability during this period of global upheaval. We will support economic growth while ensuring inflation remains well controlled.”
For buyers and sellers, this decision offers a measure of stability heading into late summer. Variable-rate mortgage holders won’t see any changes for now, as the Bank remains cautious. However, ongoing economic uncertainty could continue to weigh on consumer confidence and the housing market in the months ahead,
Bank of Canada’s 2025 Policy Interest Rate Announcement Schedule
Bank of Canada announces its decision for the overnight rate target eight times a year, typically on a Wednesday. The schedule for 2025 is as follows:
Wednesday, January 29
Wednesday, March 12
Wednesday, April 16
Wednesday, June 4
Wednesday, July 30
Wednesday, September 17
Wednesday, October 29
Wednesday, December 10
The Bank of Canada today maintained its target for the overnight rate at 2.75%, with the Bank Rate at 3% and the deposit rate at 2.70%.
While some elements of US trade policy have started to become more concrete in recent weeks, trade negotiations are fluid, threats of new sectoral tariffs continue, and US trade actions remain unpredictable. Against this backdrop, the July Monetary Policy Report (MPR) does not present conventional base case projections for GDP growth and inflation in Canada and globally. Instead, it presents a current tariff scenario based on tariffs in place or agreed as of July 27, and two alternative scenarios—one with an escalation and another with a de-escalation of tariffs.
Read the full interest rate announcement here.
Originally published on the RE/MAX Canada Blog.