The Bank of Canada announced yesterday that they're holding the Key Interest Rate at 2.25%. This is the 4th consecutive decision where they've held the rate steady.
Tiff Macklem, Governor of the Bank of Canada, said if the bank's projections for the economy ring true, future changes to the rate are expected to be small.
Closer to home, Tere Stykalo with MNP Accounting said the steady interest rate is a pretty good thing looking at local businesses and owners.
"I think [the Bank of Canada] holding the line on the interest rate is probably a middle of the road move, and it's a wait and see...when interest rates are very volatile, it's very hard to plan for how you're going to deal with your business and business decisions, with interest rates sort of holding fast, I think businesses can be confident if they need to go and make some investments, they know the rates are what they are, they can make some decisions," said Stykalo.
The Bank of Canada said they're closely monitoring the impacts of the war in Iran, which has been a concern for many Canadians with the recent spike in gas prices. Though the Bank of Canada's decision isn't saying for sure that inflation isn't an issue, it gives people a little bit more certainty when it comes to borrowing.
"Could there be uncertainty, for sure, but I think it gives businesses some level of optimism to say, ok well if we're going to borrow some money, it's pretty stable," said Stykalo.
Stykalo said the Bank of Canada's decision to hold the Key Interest Rate for a 4th consecutive decision gives something Canadians to be proud about. Looking back at Canada's economy over the years, Stykalo said there's one thing that stands out: stability.
"Showcases that Canada's banking system, I think we're very stable. I think that's something Canadians should be actually proud of, and should rely on, because when we look back, historically our Canadian economy has been resilient," said Stykalo.
The last time the Bank of Canada changed the Key Interest Rate was October 2025, when they lowered the rate from 2.5% to 2.25%.
