The Bank of Canada held its key policy interest rate steady at 2.25 percent [1] on Wednesday, April 29, 2026.
This decision keeps borrowing costs stable for consumers and businesses while the central bank monitors volatile global energy prices and domestic inflation trends.
This marks the fourth consecutive time [1] the bank has maintained the rate, which has remained unchanged since October [3]. The decision comes as the bank anticipates that inflation will peak around three percent [4] during April. Officials expect inflation to trend downward toward the two percent target [5] by early next year.
Beyond domestic metrics, the bank cited uncertainty stemming from global shocks. Specifically, officials noted the impact of higher oil and gas prices linked to ongoing conflicts [2, 8]. Reports vary on the specific nature of these tensions, with some citing general Middle East conflict [6] and others referencing a prolonged war in Iran [7].
In addition to the policy rate, the bank set the bank rate at 2.5 percent and the deposit rate at 2.20 percent [6]. These measures are intended to keep monetary policy anchored while the economy navigates external price pressures.
The bank's cautious approach reflects a balance between controlling inflation and avoiding an economic slowdown. By holding rates steady, the bank avoids further tightening while waiting for confirmed evidence that inflation is retreating toward its long-term goal.
“The Bank of Canada held its key policy interest rate steady at 2.25 percent.”
The Bank of Canada is adopting a 'wait-and-see' approach, prioritizing stability over aggressive rate cuts. By maintaining the rate at 2.25%, the bank is attempting to bridge the gap between current inflationary peaks and the 2% target for next year, while hedging against the risk that geopolitical instability in the Middle East could trigger a new spike in energy costs.
