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Canada Bank (BOCThe policy price retained 2.75 % in April, its first temporary stop after seven consecutive discounts since June 2024.
This decision came amid the uncertainty about American commercial policies, with the clarification of the ruler Tif Maclim, “We still do not know what definitions will be imposed, whether they are reduced or escalated, or for how long all this will continue.“
The main points of the BOC event
- BOC kept at night rate at 2.75 %
- Make a commercial uncertainty “impossible to issue regular economic expectations”
- He presented a scenario instead of central prediction
- The economy entered 2025 with the growth of Q4/2024 steel by 2.6 %
- The first quarter 2025 GDP growth is estimated at 1.8 %, slower than expected
- The employment decreased in March, as companies reported plans to slow the employment
- Consumer carbon tax is expected to decrease to 1.5 % in April
- “Monetary policy cannot solve commercial uncertainty or compensate for the effects of the trade war.”
Link to BOC April’s official monetary policy statement
In his press conference, the ruler McKelim confirmed this Monetary policy will continue carefully “ With special attention to the risks, being “less aspiration than usual” to clarify the commercial situation, while standing ready “to act decisively” if the evidence clearly indicates in one direction.
He explained that the current policy lies at the middle of the rate of the neutral rate (2.25-3.25 %) and warned that in a severe scenario, the consequences will be “painful” for Canada. Specifically, some exporters can bankruptcy, unemployment may rise, and Canadians may need to reduce spending.
Grand Vice -President Caroline Rogers later revealed that there are different opinions among the members of the Council on the potential economic impact of American definitions, even though some officials are “more optimistic that the effects will not be really large.”
Link to the press conference of monetary policy in April BOC
In a separate edition, BOC’s monetary policy report in April canceled its traditional economic forecast for the first time since the Covid-19 pandemic, instead of providing two scenarios for illustration due to the very uncertainty about American trade policies.
the The first scenario is assumed that most of the definitions are eventually negotiated,, Which led to the growth of the temporary gross domestic product, followed by moderate expansion, with inflation to less than 2 % before returning to it.
the Second, a more severe scenario depicting a long -term global trade war Which caused a year stagnation in Canada with a four -quarters GDP, which permanently reduces Canada’s potential production and temporarily pushing inflation above 3 % by mid -2016 before returning to the goal in 2027.
Link to the monetary policy report in April BOC
Market reactions
Canadian dollar against major currencies: 5 minutes
CAD overlap for major currencies The graph by TradingView
The Canadian dollar, which was wandering around the first session of the United States, rose after stopping work interest rate Discounts. Traders took the bank’s tone relatively less, especially given the background of Wednesday.
But LONIE quickly retreated down, as traders charged the bank’s response to customs tariff scenarios.
Later, it is possible to give the stable Macklem tone and the bank’s willingness to “behave decisively” CAD in batch, but the currency is ultimately cut around some more as the markets responded to the addresses associated with the risks. CAD ended today mixed, closed upward against drug currencies and “risk” such as AUD, NZD and GBP, but loses the ground against other disciplines.
The markets are now divided into the June decision, with a price of about 50 % of the reduction and about 50 basis points of mitigation by the end of the year.
