The Bank of Canada is widely expected to hold interest rates at current levels at the conclusion of its next policy meeting on April 29.
The central bank will disclose its latest views on the Canadian economy and inflation when it publishes its semi-annual Monetary Policy Report and makes its decision on rates known.
The Bank of Canada’s benchmark overnight interest rate is currently at 2.25%, a level it has remained at for the past three consecutive policy decisions.
Economists surveyed by Reuters (TRI) expect Canada’s central bank to remain on the sidelines for the time being. Financial market odds of another rate hold on April 29 are currently at 93%.
In particular, the Bank of Canada will have to weight the impact of higher energy prices on the country’s inflation rate.
The central bank is also likely looking for clarity on how trade relations with the U.S. are affecting Canada’s economy.
Last week, Statistics Canada reported that the country’s inflation rate rose to 2.4% in March, up from 1.8% in February. The central bank targets inflation at an annualized rate of 2%.
Governor Tiff Macklem said after the central bank’s last interest rate decision in March that the Bank of Canada would act to ensure inflationary pressures don’t become entrenched.
As a resource-based economy and net energy exporter, Canada’s economy is sensitive to fluctuations in the prices of crude oil and natural gas.
Brent crude oil, the international standard, is currently trading at $106 U.S. per barrel, up more than 40% since the U.S. and Israel attacked Iran on Feb. 28.
