Saturday, May 31, 2025

Latest

Bank of Canada Dials Back Bond Purchases, Reiterates Economic Forecast

The Bank of Canada has taken yet another step to normalize its emergency monetary policies, amid a renewed optimistic outlook on the speed of the economic recovery.

As widely expected, Bank of Canada policy makers led by Tiff Macklem announced on Wednesday that the central bank will taper its weekly government debt purchases from $3 billion to $2 billion. The bank also kept the overnight rate unchanged at 0.25%, while reiterating its previous guidance of refraining from a rate hike until at least the second half of 2022.

The latest decision to reduce bond purchases is in line with the central bank’s desire to return to a state of normalized monetary policy— putting it significantly ahead of its peers in terms of unwinding stimulus measures. This marks the third time that policy officials have pared back the asset purchase program, further bolstering expectations that the Bank of Canada will be the first among developed economies to raise interest rates.

Despite the Bank of Canada’s dialling back of asset purchases, the central bank contends that the country’s economy still has a ways to go before excess capacity is fully absorbed. The bank’s policy makers are anticipating that excess demand levels will not be reached until at least 2023, and although vaccine progress and the lifting of pubic health restrictions have provided a significant boost, the spread of Covid-19 variants continue to remain a risk.

Following the Bank of Canada’s announcement, the Canadian dollar erased previous gains, and is trading at around $1.25 per US dollar.


Information for this briefing was found via the Bank of Canada. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

How To Profit From $3300 Gold? An Inside Look At A Massive 300,000 Oz Project | Martino De Ciccio

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

Recommended

ESGold Begins Concentration Tests Ahead Of First Production

Sterling Metals Hits 0.21% Copper Over 482.8 Metres In First Drilling At Soo Copper project

Related News

Bank of Canada Predicts Slow, Uneven Economic Recovery

The coronavirus pandemic brought about significant changes to Canada’s economy, causing many Canadians to change...

Friday, June 19, 2020, 07:03:00 PM

Tiff Macklem Promises More Rate Hikes, Acknowledges Core Inflation Isn’t Weakening

Even though incoming data suggests Canada’s economy may be weakening, Bank of Canada Governor Tiff...

Thursday, October 6, 2022, 04:20:14 PM

Bank Of Canada Survey Reports That Businesses Expect A Recession In The Next 12 Months

The Bank of Canada released its business outlook survey for the third quarter on Monday,...

Wednesday, October 19, 2022, 11:57:00 AM

Bank of Canada Reduces Bond Purchases, Hints at Earlier Rate Increase

The Bank of Canada took a more prudent monetary approach on Wednesday, in wake of...

Thursday, April 22, 2021, 11:42:00 AM

Bank Of Canada Pandemic Purchases Total To $795 Billion–Report

The COVID-19 pandemic triggered a global economic crisis, sending shockwaves through financial markets. In a...

Friday, October 13, 2023, 10:29:00 AM