The Bank of Canada held its key interest rate steady at 2.25% on Wednesday, as rising tensions tied to the Strait of Hormuz continue to rattle global markets.
With nearly 20% of the world’s oil supply moving through the region, disruptions have pushed oil and gas prices higher, raising concerns about inflation and the cost of everyday essentials across Canada.
Governor Tiff Macklem noted that while supply cuts don’t directly impact Canada, global price increases are already being felt. As global supply shrinks, prices climb—and Canadians aren’t immune to those effects,” he explained
The central bank warned that a prolonged conflict could further tighten supply chains, affecting not just energy but also key goods like fertilizer—potentially driving up food prices as well.
While Canada may benefit from higher demand for its exports, households and businesses are still feeling the squeeze from rising costs at the pump and grocery store.
For now, the Bank is taking a wait-and-see approach, but officials made it clear they’re ready to act if inflation pressures grow.
(Source: MSN)
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