By Dow Jones Newswires Staff
A flurry of central-bank decisions took place this week as the war in the Middle East continued with no clear sign of de-escalation.
As the fighting disrupts energy supplies, the price shock is rippling out across industries, threatening to curb economic growth and drive up inflation.
Policymakers the world over are monitoring the fallout, alert to the risks of a drawn-out conflict that would upend the global economy.
Here is a rundown of the central bank action so far:
AUSTRALIA: The Reserve Bank of Australia raised rates in a widely expected decision. Inflation had already been running hot before the energy shock hit, and the Middle East conflict might have sealed the deal. The decision was tightly contested, with the board voting 5-4 in favor of an increase.
CANADA: Canada's central bank left its policy rate unchanged at 2.25%, and warned of painful economic repercussions from a prolonged and wider war in the Middle East. Gov. Tiff Macklem said the central bank is going to look past the war's immediate impact on prices, which he said would push the consumer-price index higher starting in March.
EUROZONE: The European Central Bank kept its key rate on hold at 2%. Its President Christine Lagarde said that energy costs would have a "material impact" on inflation, as the bank raised its 2026 inflation forecast for the 21-nation eurozone to 2.6% from 1.9%.
INDONESIA: Bank Indonesia left its benchmark seven-day reverse repo rate at 4.75%, a hawkish hold viewed as signaling the end of the easing cycle. Gov. Perry Warjiyo said the bank's priority is to stabilize the rupiah amid the Iran conflict and keep inflation on target.
JAPAN: The Bank of Japan maintained its policy rate at 0.75% but said it remains committed to tightening when conditions are right. BOJ Gov. Kazuo Ueda said the central bank is monitoring the risks around the conflict closely, including the possibility that higher energy costs could accelerate underlying inflation in Japan.
SWEDEN: The Riksbank held its policy rate at 1.75%, and said it remains vigilant and ready to act should the conflict intensify and impact inflation or the economic outlook. Its baseline scenario assumes that the war has moderate effects on inflation.
SWITZERLAND: The Swiss National Bank held its key interest rate at 0% for a third straight meeting, and signaled its willingness to intervene in the foreign-exchange market if the franc appreciates sharply. Safe-haven flows led the franc to new highs against the euro and dollar after the start of the Iran war.
TAIWAN: The Central Bank of the Republic of China (Taiwan) again left rates on hold as it raised its inflation outlook, citing uncertainty stemming from the Middle East conflict. The central bank warned about the impact of higher energy costs, now projecting inflation of 1.80% in 2026, up from its previous forecast of 1.63%.
U.K.: The Bank of England left its key rate unchanged at 3.75% and signaled that it was prepared to raise interest rates to counter the pickup in inflation if it threatened to become persistent.
U.S.: The Federal Reserve held its benchmark federal-funds rate in a range between 3.5% and 3.75%, with Chair Jerome Powell saying little to suggest cuts were around the corner amid higher energy prices.
Write to Ed Frankl at edward.frankl@wsj.com
(END) Dow Jones Newswires
March 20, 2026 08:47 ET (12:47 GMT)
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