The Bank of Canada has dropped its key interest rate for the seventh consecutive month, bringing the rate to 2.75 per cent.

The drop of 25 basis points comes at a time of economic uncertainty created by the trade war between Canada and the United States.

Although Trump decided to extend a pause on the across the board tariffs on Canada and Mexico, the economy is already feeling the impact with both Canadians and American markets plunging earlier in the week.

Economists are now watching closely at how the central bank chooses to proceed as the tariffs are likely to hamper economic growth and cause a flare in inflation.