The Bank of Canada left its target for the overnight rate unchanged at 2.25% on 18 March 2026, citing a weaker-than-expected domestic growth profile and heightened downside risks even as the recent surge in global energy prices raises near-term inflation pressures. The policy rate has remained at 2.25% since it was lowered by 25 bp in October 2025. The operating corridor was kept at 30 bp, with the Bank Rate at 2.50% and the deposit rate at 2.20%. Canadian GDP contracted 0.6% in 2025Q4 after a 2.4% expansion in Q3, employment losses in early 2026 pushed the jobless rate up to 6.7% in February, and CPI inflation eased to 1.8% in February while core measures hovered around the 2% target; higher gasoline prices are expected to lift headline inflation in coming months. Externally, the CAD–USD exchange rate has been stable, but the Middle East conflict has driven oil and natural-gas prices sharply higher, tightened global financial conditions, and widened credit spreads. Governing Council will keep assessing the effects of US tariffs, trade uncertainty and the unfolding conflict, and reiterated that it stands ready to adjust policy if the outlook for growth or inflation materially changes.
Bank of Canada 2026-03-18
BoC keeps overnight rate steady at 2.25% (18 Mar 2026)
The Bank of Canada on 18 Mar 2026 kept the overnight rate at 2.25 %, with the bank rate at 2.50 % and deposit rate at 2.20 %, maintaining its 30 bp corridor. The pause reflects weaker domestic growth, higher unemployment and widening external risks despite energy-driven inflation pressures, and the Governing Council reiterated its readiness to adjust policy if the outlook shifts.