ING forecasts no change in BoC policy as inflation cools and oil prices bolster the Canadian dollar.
The Bank of Canada is expected to maintain its benchmark interest rate at 2.25% in its upcoming decision, as inflation pressures ease and oil prices provide support for the Canadian dollar. Analysts see limited urgency for the central bank to counter modest market pricing for a December tightening.
June consumer price index data may show headline inflation falling below 3.0%, driven by declining petrol prices, while core inflation remains stable. The BoC’s cautious stance aligns with broader expectations of a gradual policy normalization amid economic uncertainty.
ING’s forecast suggests the central bank will prioritize data dependency, with no immediate shift in its policy outlook.