FX.co ★ Bank of Canada Keeps Rate at 2.25%

In December 2025, the Bank of Canada maintained its target overnight rate at 2.25%, with the Bank Rate at 2.50% and the deposit rate at 2.20%. This follows indications from October that the current policy rate was considered appropriate. Economic growth exceeded expectations as the GDP grew by 2.6% in the third quarter, and the labor market showed signs of improvement, evidenced by a drop in the unemployment rate to 6.5% in November. Consumer Price Index (CPI) inflation decreased to 2.2% in October, and the Bank assessed that core inflation measures stayed within the 2.5% to 3% range, with underlying inflation around 2.5%. Policymakers acknowledged persistent global uncertainties, tariff-related pressures, and fluctuating trade, which may continue to cause quarterly GDP variations. If inflation and economic activity proceed roughly in line with the October forecasts, the Governing Council considers the current policy rate suitable to maintain inflation near the 2% target while supporting the economy's structural adjustments. However, they remain prepared to make adjustments should the outlook shift.