Bank of Canada Holds Rate, Flags Oil & CAD
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- Bank of Canada held its policy rate steady for a fourth time in late April while weighing inflation risks from the Iran war.
- Governor Tiff Macklem said the Middle East conflict could trigger either rate cuts if inflation stays low or rate hikes if oil price pressures rise.
- USMCA review outcomes and the ongoing Iran war were flagged as key uncertainties shaping Canada’s growth and inflation outlook.
- Canadian dollar exchange rate with the U.S. dollar will influence the degree of tightening needed in a higher‑inflation scenario.
Why it matters: Canadian borrowers will see higher rates after the June 10 meeting if oil prices stay above $75, while exporters will gain from a stronger CAD in the next year.
