MNI BRIEF: BOC Affirms Rates Can Hold Amid Iran, Trade Risks

Bank of Canada Governor Tiff Macklem said Wednesday his policy interest rate remains appropriate as long as the economic outlook holds up, and financial markets have continued to function since the outbreak of fighting in Iran.

"If the situation changes, and in particular if that has a material effect on the outlook, we are prepared to respond," he said after a speech in Toronto, also echoing a position laid out at the last rate decision on Jan. 28. The Bank's next meeting is March 18 and most investors see the 2.25% overnight rate staying in place into 2027. 

The Bank continues to evaluate risks from a trade dispute with the U.S. against a baseline forecast and scenarios mapped out in its economic projections, he said. (See: MNI INTERVIEW: Trade Woes Mean BOC Stagflationary Risk-CD Howe) 

Macklem wasn't asked about a recent report showing Q4 GDP shrank at a 0.6% annualized pace while the Bank estimated it would be little changed.