Bank of Canada holds interest rates: Read the official statement

Bank of Canada building is seen in Ottawa on March. 9, 2026. Photo by HYUNGCHEOL PARK/Postmedia

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Here’s the Bank of Canada’s official statement for its rate decision:

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The Bank of Canada today held its target for the overnight rate at 2.25 per cent, with the Bank Rate at 2.5 per cent and the deposit rate at 2.20 per cent.

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The evolving conflict in the Middle East is causing heightened volatility and U.S. trade policy continues to reshape global trade patterns. Both are ongoing sources of uncertainty. The Bank’s April outlook assumes tariffs remain unchanged and the global benchmark price of oil declines to US$75 per barrel by mid 2027.

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The Iran war has led to sharply higher energy prices and transportation disruptions, diminishing growth prospects in oil-importing countries and boosting inflation worldwide. In the United States, growth is still expected to be solid over the projection horizon, boosted by AI-related investment and consumption growth. China’s economy is being supported by robust exports. In the euro area, higher prices for oil and natural gas will weigh on economic activity.

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Financial conditions have been volatile, reflecting daily developments in the Middle East and shifting market expectations for inflation and interest rates. Bond yields are modestly higher since January while equity markets, which weakened sharply at the outset of the war, have recovered. Since the start of the war, the U.S. dollar has appreciated against most major currencies. The Canada-U.S. exchange rate has been relatively stable.

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Overall, the global economy is expected to grow by about three per cent in 2026, 2027 and 2028. Projections for inflation over the next year are revised up because of the jump in energy prices.

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The outlook for economic growth in Canada is little changed from the January Monetary Policy Report (MPR) projection. After a contraction in the fourth quarter of 2025, growth is forecast to have resumed in early 2026. Consumer and government spending are supporting economic activity, while tariffs and trade uncertainty are weighing on exports and business investment. Housing activity declined in the fourth quarter and is being held back by slow population growth, economic uncertainty and ongoing affordability issues. The labour market is soft, with subdued employment growth over the past year and job losses in sectors targeted by U.S. tariffs. The unemployment rate remains in the 6.5 per cent‑ seven per cent range, reflecting both weak hiring and fewer job seekers.

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The Bank’s April forecast projects GDP growth of 1.2 per cent in 2026, rising to 1.6 per cent in 2027 and 1.7 per cent in 2028 as growth in exports and business investment resumes along a lower trajectory. With GDP growing slightly above potential, the current excess supply in the economy is gradually absorbed. While the war in Iran may alter its composition, overall GDP growth is little changed in the updated forecast: Since Canada is a large net exporter of oil, higher oil prices increase national income even as consumers are squeezed by higher gasoline prices.