The Bank of Canada announced the 6th consecutive drop to the interest rate, and the lowest interest rate since September 2022.
Canada’s new interest rate is now 3 per-cent after a decrease of 25 basis points.
During a press release held this morning, Tiff Macklem, Governor of Bank of Canada, discussed the Monetary Policy Report but also fielded questions regarding the depreciation of the Canadian dollar.
Currently the Canadian dollar is worth 69 cents to every U.S. dollar.
“We’ve seen the recent depreciation, we’ve seen in the Canadian dollar has been more driven in our view by trade uncertainty and particularly President Trump’s threats to impose 25% tariffs on Canadian exports,” Macklem said.
This depreciation will have impacts on foods being imported.
“The cost of things we import will be higher, and you will start to see that relatively quickly on things like fresh fruit and vegetables, which obviously its winter in Canada. We import a lot of those from the United States, that’ll get passed through pretty quickly.” Macklem continued.
Grocery store prices are already considered high, according to London shoppers.
“I can’t afford for prices to go up anymore,” said Food Basics shopper and London local, Lauren Kline. “I just bout a pack of romaine lettuce for $7, which is insane.”
Shoppers weren’t fond of another increase on fruits and vegetables.
“I mean, I’m not surprised. It’s either one thing or another making the food go up,” said mother of two, Tina Paperoes. “I’m very lucky to be in the place I am but I know many families are already struggling, and price increases are just going to hurt people more.”
Imported foods will be the first to see the increase of the Canadian dollar depreciation, however there are other things that will be affected as well.
“The other implication of a weaker Canadian dollar is that any intermediate inputs, so for example, machinery and equipment, investment investments Canadian companies make buy equipment from the United States, that that becomes more expensive, that will hurt our investment,” Macklem continued.
According to Macklem, the timing of the depreciation is directly corelated to the tariff threats imposed by U.S. President, Donald Trump.
