The Bank of Canada keeps rates unchanged at 2.25% at the December 2025 meeting.

Bank of Canada Keeps Rates Unchanged

The Bank of Canada (BoC) has decided to keep its policy rate at 2.25%. This decision comes as inflation remains near target and the economy adjusts to global trade disruptions. Particularly, the complexities of the global economy affected by US trade protectionism and weakness in Chinese domestic demand are noteworthy.

Economic Indicators

Recent reports show that Canada’s Q3 GDP growth surprised at 2.6%, but this growth is attributed to volatile trade flows, with domestic demand flat. While there are signs of improvement in the labor market, with employment gains and a drop in the unemployment rate to 6.5%, trade-sensitive sectors remain weak.

Inflation and Outlook

Inflation continues to hover near the target, with a Consumer Price Index (CPI) reading of 2.2% and core measures between 2.5% and 3%. The BoC remains ready to adjust its policy stance if necessary. The USDCAD was trading at 1.3848 before the announcement, reaching a session high of 1.3871 post-statement before easing back to 1.3855. In technical analysis, buyers encountered sellers at the 100-hour moving average, with a potential rise if this level is broken. Key support at the 50% midpoint of 1.3839 remains critical, as maintaining this level could keep a slight bullish bias.