After announcing that the Bank of Canada’s key interest rate would remain at 0.5%, where it’s been since mid-2015, the bank governor concedes that a rate cut is ‘on the table’.

(Patrick Doyle / Bloomberg)

The reason that’s the case, according to Stephen Poloz, is the country’s central bank is weighing the impact of a more protectionist U.S. under Donald Trump, not to mention ongoing economic weakness here.

Poloz adds Canada’s economy will take a ”material” hit from a more protectionist stance under the incoming president but that the bank is not ready to quantify any potential damage.

The Canadian dollar plunged more than a full penny on the comments.

In it latest forecast, the Bank of Canada assumes the new administration and Congress will push through significant personal and business tax cuts, which will give Canada’s economy a modest lift.

But the central bank points out its outlook for the Canadian economy does not reflect ”the full range” of possible American policy changes – most notably greater protectionism.

Trump’s repeatedly warned of a ”massive” border tax and an overhaul of the North American Free Trade Agreement.