The Bank of Canada’s Governing Council left the target for the overnight rate unchanged at 2.25 percent on 10 June 2026, with the Bank Rate at 2.50 percent and the deposit rate at 2.20 percent, judging that weak domestic activity and lingering global risks offset near-term energy-driven inflation pressures. After two 25 bp cuts in September and October 2025 that lowered the policy rate from 2.75 percent to 2.25 percent, the rate has since been on hold. The operating band around the overnight target remains 25 bp, and no new liquidity measures were announced. Canadian GDP slipped 0.1 percent in Q1, the unemployment rate was 6.6 percent in May, and the central bank expects only a modest Q2 rebound, leaving the economy in excess supply; CPI inflation rose to 2.8 percent in April on higher oil prices and carbon-tax base effects, while core measures eased to around 2 percent and headline inflation is projected to hover near 3 percent before gradually returning to target. Financial conditions have loosened, equity markets are buoyant, bond yields volatile, and the Canadian dollar has weakened against the USD. Globally, the four-month-old Middle East conflict is lifting energy prices and disrupting supply chains, while persistent US tariff uncertainty clouds the outlook despite solid US demand, subdued euro-area growth and export-led resilience in China. The Council reiterated it will “look through” the war-related inflation spike but stands ready to act if higher energy costs threa
Bank of Canada2026-06-10
Bank of Canada keeps target for the overnight rate unchanged at 2.25%
Bank of Canada left the overnight rate at 2.25 % on 10 Jun 2026 (Bank Rate 2.50 %, deposit rate 2.20 %) with no new liquidity measures, extending last year’s 50 bp cumulative easing. Citing weak domestic demand, excess supply and softer core inflation, the Governing Council will “look through” war-related energy spikes but is prepared to act if price pressures jeopardise its inflation target.