Bank of Canada holds at 2.25% for a seventh straight decision

The Bank of Canada held its target for the overnight rate at 2.25% on 2 September 2026, with the Bank Rate at 2.5% and the deposit rate at 2.20%. It was the seventh decision in a row without a change.

The reasons given

In its opening statement the Bank said the continuing conflict in the Middle East and the breakdown in trade talks between Canada and the United States have kept uncertainty elevated.

The domestic picture was firmer than expected. Canada's economy grew more strongly than anticipated in the second quarter, supported by solid domestic demand and a rebound in exports. Headline consumer price inflation has moved somewhat higher in recent months, to around 3%, reflecting higher energy prices, while the Bank judged that underlying price pressures remain broadly contained.

Why oil matters for the loonie

Crude oil is one of Canada's largest exports, so energy prices feed into the Canadian dollar through trade flows as well as through inflation. With Brent crude above $100 a barrel in early September, the Bank faces higher headline inflation that it considers largely an energy effect.

For USD/CAD, that leaves three drivers to follow: oil prices, the interest-rate gap with the Federal Reserve, and any change in US–Canada trade relations.

Next decision

The Bank's next scheduled announcement is on 28 October 2026, together with its next Monetary Policy Report.