Canada interest rates: what to expect amid rising oil prices and global uncertainty

The Bank of Canada is expected to announce its next interest rate decision on Wednesday, 18 March, with economists watching closely to see whether borrowing costs will change.

According to reports, the central bank last held its key interest rate at 2.25 per cent in January. The rate has remained unchanged since October 2025.

At the time, the Bank of Canada governing council said the level remained “appropriate” given current economic conditions.

However, economic uncertainty has increased in recent weeks, including geopolitical tensions and rising oil prices, which may influence the bank’s decision.

Penelope Graham, a mortgage expert with Ratehub.ca, said to the Daily Hive global developments could affect Canada’s economic outlook and future rate cuts.

“Rising oil prices, if sustained, could quickly re-heat inflation growth and compel the Bank to hold off on future rate cuts, even as Canadians struggle to cope with high living costs and ongoing trade uncertainty,” she said.

Graham believes the central bank is likely to keep rates unchanged in March due to the evolving economic environment.

She said the Bank of Canada will most likely continue to hold the policy rate “with little to no rate relief on the horizon for the remainder of this year.”