Bank of Canada holds key interest rate steady at 2.25%

Released: March 20, 2026

On Wednesday, March 18, the Bank of Canada announced its decision to hold its key interest rate at 2.25%, citing that higher oil prices from the war in the Middle East will likely push inflation upwards. Since the outbreak of the war, global oil and natural gas prices have increased sharply. A rate hold by the Bank of Canada signals uncertainty about the Canadian economy. “The Canadian economy continues to face heightened uncertainty related to US trade policy and geopolitical risks,” said Tiff Macklem, Governor of the Bank of Canada, during a press conference to discuss the Bank of Canada’s rate decision. “Now the war in Iran has added a new layer of uncertainty. Its impact on the global and Canadian economies will depend on how long the conflict lasts and the extent to which it spreads across the Middle East,” he added. The decision to hold interest rates steady — the third such decision in a row — was widely expected by economists. The Bank of Canada noted that in addition to energy supply disruptions, the closure of the Strait of Hormuz could lead to additional bottlenecks and impact the global supply of other commodities, potentially adding further strain to the Canadian economy. The next rate decision by the Bank of Canada is scheduled for April 29, 2026, followed by five more scheduled in the second half of the year.

Data for this week’s chart comes from the Bank of Canada Policy Interest Rate.

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