Bank of Canada cuts key interest rate by 0.25 percentage points…"Concerns over weak economy and tariff uncertainty"

"US trade measures deliver a direct blow to major industries"

The Bank of Canada on the 29th (local time) cut its benchmark interest rate by 0.25% percentage points from 2.50% to 2.25%. The move was taken in consideration of an economic slowdown caused by the tariff policies of the Donald Trump administration.

The Bank of Canada said that at a monetary policy meeting it decided to lower the overnight repo (Repo·repurchase agreement) rate, the policy rate, by 0.25% percentage points to 2.25%. The decision was in line with market expectations.

The Bank of Canada explained the cut, "With the economy continuing to show weakness, inflation is expected to remain around the 2% target." It added, "US trade measures and the resulting uncertainty are having a severe impact on industries targeted by tariffs such as autos, steel, aluminum and lumber," adding, "As a result, growth is expected to slow in the second half of this year."

The Bank of Canada forecast growth of 1.2% this year, 1.1% in 2026 and 1.6% in 2027.

Im Dayeon, reporter allopen@hankyung.com