The Bank of Canada held its overnight rate at 2.25% on Wednesday, marking the third consecutive meeting at which the Governing Council opted against adjusting the policy rate in either direction. The decision, announced on 18 March, came as the war in the Middle East increased volatility in global energy prices and financial markets, and as recent data pointed to weaker economic activity in Canada.
In its announcement, the bank said the war in the Middle East had increased volatility in energy prices and financial markets, that risks to growth looked tilted to the downside, and that inflation risks had gone up due to higher energy prices; it also said it would continue to assess the impact of US tariffs and trade policy uncertainty. The bank said it stands ready to respond as the outlook evolves.
PRIOR EASING
The holds follow a sequence of rate reductions that brought the overnight rate down from the levels reached during the post-pandemic inflation-fighting period.
NEXT STEPS FOR CANADIAN MONETARY POLICY
The Governing Council will next review the overnight rate at its April 2026 meeting, alongside the publication of its quarterly Monetary Policy Report, which will provide updated economic forecasts for inflation, growth and the labour market.