In this blog:
What Does the Bank of Canada do?
Eight times a year, the Bank of Canada (BOC) announces its benchmark lending rate based on an assessment of the Canadian economy. This rate directly impacts variable interest rate products, such as mortgages, loans, and lines of credit, as banks and lenders adjust their prime rates accordingly. Understanding these changes can help you make informed financial decisions. For more information, take a look at our blog post summarizing four of the most frequently asked questions regarding the BOC.
Below, we break down the latest announcement and what it means for you.
Were there any Changes to the Interest Rate?
The overnight rate continues to hold at 2.25 percent, after Bank of Canada makes its first announcement of the new year.
The announcement comes as expected with the Bank of Canada expressing the policy rate “remains appropriate” for the current economy.
What Information did the Bank Share about the Economy?
Canadian Economy
- Moderate growth is reported for Canada’s economy, with no projections for substantial growth in the future. The country is still adapting to the slowed population growth and unpredictability of trades.
- Inflation remains near the Bank’s 2 percent target – the level it aims for to ensure stable prices. This means inflation pressures aren’t currently strong enough to push the Bank into raising interest rates, but as uncertainty is heightened, risks are being monitored closely.
Global Economy
- Economic growth in the United States is stronger than previously projected. This is being driven by continued consumer spending and investment in technology areas.
- In China, growth is slowing as domestic demand decreases, even as its exports remain relatively strong.
- Financial markets around the world are generally stable and supportive of economic activity. The Bank is projecting an average 3 percent growth to global growth.
How does this Impact Me?
Variable rate loan holders will see no change to their payments because of today’s announcement.
With increasing uncertainty of what this year will hold, it will be important to remain informed of political and economic changes impacting our country that could lead Bank of Canada to make changes.
Will there be any Interest Rate Changes in the Near Future?
The next Bank of Canada rate announcement is scheduled on Wednesday, March 18, 2026. While the Bank held rates today, it stressed that future decisions depend on economic data – especially inflation trends and how the economy adjusts to global events. Some analysts believe rates could stay steady for most or all of 2026 unless unexpected pressures emerge.
