The world's leading central banks this week expressed caution over the risk of further increases in energy prices, which could potentially lead to a spike in inflation in many countries due to the impact of the conflict in the Middle East, BTA reported.
The European Central Bank (ECB), the US Federal Reserve (Fed), the British central bank “Bank of England“ (Bank of England), the Canadian “Bank of Canada“ (Bank of Canada), the Japanese “Bank of Japan“ (Bank of Japan), Reserve Bank of Australia (RBA), Swiss National Bank (SNB), Central Bank of Sweden (Riksbank), Russian Central Bank “Bank of Russia“ and the People's Bank of China, as well as the central banks of some emerging economies.
They all declared their readiness to resist any surge in consumer prices, while crude oil prices settled above the psychological level of $ 100 per barrel after the disruption of energy supplies from the Persian Gulf.
Before the start of the US-Israeli offensive against Iran on February 28 and the subsequent Iranian attacks on countries in the region, many analysts were betting that most leading central banks would ease their monetary policy.
However, the conflict has raised concerns about oil and natural gas supplies, especially after Iran announced the closure of the Strait of Hormuz, a key sea route through which about a fifth of the world's oil and liquefied natural gas trade normally passes. These fears have been further exacerbated by damage to energy infrastructure in the Middle East due to missile and drone attacks in recent days, which has prompted monetary institutions in many countries to keep key interest rates at their current levels, and some of them, such as the Reserve Bank of Australia, to raise rates.
Central bankers seem determined to contain rising prices without undermining the still uneven economic growth and, above all, to avoid stagflation - the unfavorable combination of economic downturn and high inflation, Reuters points out.
European Central Bank
The European Central Bank (ECB) kept its key interest rates at the level for the sixth consecutive meeting. This came after a two-day meeting of the institution, in which Bulgaria participated for the second time as a full member of the eurozone and for the first time with voting rights - in the person of the Governor of the Bulgarian National Bank Dimitar Radev.
The ECB's decision was widely expected by analysts. Thus, the bank's deposit rate (the interest rate received by commercial banks when they deposit funds overnight with the central bank) remains at 2 percent, the rate for the main refinancing operations (the interest rate paid by banks when they borrow funds from the ECB for a period of one week) is maintained at 2.15 percent, and the interest rate on the marginal lending facility, at which banks can borrow funds from the ECB overnight - 2.40 percent. All three of the bank's key interest rates have been at their current levels since June 2025.
The ECB warned that the war in the Middle East significantly increases uncertainty about the economic outlook, creating both risks of higher inflation and a slowdown in economic growth.
After announcing the interest rate decision, the bank's President Christine Lagarde said she was ready to intervene if the situation worsened. According to her, the war in the Middle East has sharply increased uncertainty and has put the eurozone economy in front of a double challenge - higher inflation and weaker growth.
However, the ECB is better prepared this time compared to the crisis with high energy prices in 2022, Lagarde stressed.
“The war has made the outlook significantly more uncertain, creating risks of rising inflation and risks of slowing economic growth“, the ECB president also said, referring to the conflict in Iran.
US Federal Reserve Board
The US Federal Reserve Board (FRB) also left its key interest rate unchanged in the range of 3.5 - 3.75 percent.
The decision to maintain interest rates, announced after the end of the two-day meeting of institution, was accompanied by updated UFR forecasts for the US economy.
The central bank raised its forecasts for economic growth and inflation. U.S. gross domestic product is expected to grow 2.4 percent in 2026, up from a previous estimate of 2.3 percent published in December. Inflation, both overall and core (excluding energy and food prices - ed.), is forecast to reach 2.7 percent by the end of the year, with a target of 2 percent.
At a press conference after the meeting, Fed President Jerome Powell warned that rising oil prices "due to the conflict with Iran are likely to accelerate inflation in the near term."
He said short-term inflation expectations had risen in recent weeks due to a significant rise in oil prices caused by supply disruptions from the Middle East.
„Bank of England“
The central bank of the United Kingdom - „Bank of England“ kept its main interest rate unchanged - at 3.75 percent.
The decision was made by the bank's Monetary Policy Committee with an absolute majority of 9 votes.
According to the economic assessments accompanying the decision to keep interest rates on hold, British inflation will fall to the target level of 2 percent in the spring. However, the Governor of the “Bank of England“ Andrew Bailey stated that “if the situation develops favorably, there will be an opportunity for a further reduction in interest rates this year“.
The “Bank of England“ last cut interest rates in December - by 25 basis points, and at its first meeting of 2026 in early February, it kept rates on hold. However, the vote was contested at that time, as it was taken with five votes “in favor“ against four “against“.
Swiss National Bank
The Swiss Central Bank's key interest rate also remained unchanged - at 0 percent. The institution is the only one of the world's leading central banks whose key interest rate is zero.
The Swiss central bank said that, against the backdrop of the conflict in the Middle East, they are ready to step up interventions in the foreign exchange market in order to limit the excessive appreciation of the Swiss franc, which could threaten price stability in the country.
After the announcement of the decision, the franc temporarily weakened, but subsequently recovered its position and traded slightly higher against the euro and the dollar.
Swedish Central Bank
The Swedish Central Bank decided to maintain interest rates for the fourth consecutive meeting.
Thus, the key interest rate remains at 1.75 percent - the lowest level in three years. The institution also confirmed its forecast that the interest rate will remain at this level until 2027.
The bank points out that the war in the Middle East has led to significant fluctuations in energy prices and financial markets, including an increase in short-term market rates.
The sharp increase in oil prices and the effects of the conflict in the Middle East are likely to exert additional upward pressure on prices in Sweden despite the stronger Swedish krona, according to the bank's forecasts.
„Bank of Japan“
The interest rates of the „Bank of Japan“ remained at 0.75 percent, the Japanese central bank announced after its two-day meeting. However, the bank warned of growing inflation risks related to the increase in oil prices due to the conflict in the Middle East. Japan gets much of its energy from Gulf countries.
During the discussions, Board member Hajime Takata reiterated his January proposal to raise the interest rate to 1.0 percent, which was again not supported.
“As a result of heightened tensions related to the situation in the Middle East, global financial and capital markets have been characterized by instability and crude oil prices have risen significantly; future developments deserve attention“, the Bank of Japan said in a statement accompanying the announcement of the interest rate decision.
“Bank of Canada“
Canada's central bank “Bank of Canada“ kept its key interest rate unchanged at 2.25 percent. The financial institution also said it was closely monitoring the risk of inflationary pressures caused by rising energy prices due to the war in the Middle East.
“The conflict in the Middle East has increased the volatility of global energy prices and financial markets and raised risks to the global economy. The scale and duration of the conflict crisis, and hence its economic consequences, are extremely difficult to predict“, the “Bank of Canada“ said in a press release after the meeting.
“It is still too early to assess the impact of the war on economic growth in Canada“, said Tiff Macklem, governor of the central bank, quoted by Reuters at the time. He specified that the risk that high energy prices would quickly pass through to the prices of other goods and services remained limited for the time being.
“Bank of Russia“
The Russian central bank “Bank of Russia“ cut its key interest rate by 50 basis points (0.5 percentage points) to 15 percent.
“The (Russian) economy is moving towards a balanced growth trajectory“, the financial institution said in a statement.
The bank will assess the need for a further rate cut depending on the sustainability of the inflation slowdown, the development of inflation expectations and “an analysis of risks emanating from both the domestic and external economic environment“.
Russia's central bank has kept interest rates close to around 20 percent for two years as the country's economy has benefited from a surge in military spending linked to the full-scale military invasion of Ukraine that began in February 2022.
The bank has gradually lowered its key interest rate in 2025, while annual inflation fell to approximately 5.6 percent in 2025 compared to 9.5 percent in 2024.
The bank also maintained its inflation target of about 4 percent in 2027.
Reserve Bank of Australia
Australia's central bank raised its benchmark interest rate by 25 basis points to 4.1 percent.
The increase is the second in a row and returns some of the previous monetary policy easing, after the central bank had already lowered rates three times last year.
The central bank said that inflation remained above the target range of 2 percent to 3 percent, and short-term inflation expectations already point to an increase. “The conflict in the Middle East has led to a sharp rise in fuel prices, which, if sustained, will contribute to inflation“, the institution said in a statement.
Fuel prices in Australia, which relies on imports to cover more than 90 percent of its fuel needs, almost doubled this week, with the government accusing retailers of unreasonably raising prices.
People's Bank of China
The People's Bank of China, the country's central bank, left its key interest rates unchanged. The one-year lending rate (LPR) remained at 3 percent and the five-year rate at 3.5 percent.
The one-year lending rate affects most consumer and business loans. The interest rate on five-year loans mainly affects the value of mortgage loans granted for the acquisition of real estate.
According to this year's government work report in 2026, China will continue to pursue a more active fiscal policy and implement an appropriate expansionary monetary policy.
Chinese consumer prices in March fell for the second consecutive month - by 0.1 percent on an annual basis. Returning to sustainable growth in consumer and producer prices in China is a challenge for the authorities, analysts say.
A large part of the oil that China imports comes from Gulf countries, including Iran, which could potentially push prices back up in China.
Brazil's Central Bank
Brazil's Central Bank (Banco Central do Brasil) has undertaken a long-awaited interest rate cut, cautiously cutting rates by 25 basis points. However, the bank refrained from giving specific guidance on its next steps.
The bank's interest rate setting committee (Copom) voted unanimously to lower the benchmark interest rate to 14.75 percent, after five consecutive meetings in which it was held at 15 percent - the highest since July 2006.
A statement from the Brazilian central bank stressed the importance of "calm and prudence in the conduct of monetary policy, so that future steps to adjust interest rates take into account new information on the scale and duration of the conflicts in the Middle East."
Following the sharp rise in oil prices in recent weeks, the government of President Luiz Inácio Lula da Silva announced tax breaks and a direct subsidy for diesel fuel.
The central bank of Indonesia
Indonesia's central bank, Bank Indonesia, kept its benchmark interest rate at 4.75 percent, a move widely expected by economists. The rate has remained unchanged since October, and the central bank dropped its previous rhetoric of seeking to lower borrowing costs.
Indonesia's central bank will tighten regulations on cash purchases of foreign currency, reducing them from $100,000 per buyer per month to $50,000, starting in April. Forward and swap limits have been increased, and the central bank will continue to intervene in the market when necessary, Governor Peri Wardjo said.