Bank of Canada Upholds Commitment to Keep Overnight Rate Unchanged Until 2023

The Bank of Canada reiterated its stance on keeping interest rates historically low in order to support Canada’s economic recovery amid a resurgence of infections and resulting lockdowns.

On Wednesday, policy makers at Canada’s central bank decided to keep the overnight rate at 0.25%, while restating the promise to keep borrowing costs subdued until the economic damage from the pandemic is fully corrected. The bank does not anticipate that a complete economic recovery will occur until at least 2023, and as a result, also pledged to continue buying Canadian government bonds to the tune of at least $4 billion per week. However, the BoC did indicate that it could scale back the weekly purchases in the event that the recovery makes more headway.

The BoC also held off from initiating any new policy changes until more clarity emerges in terms of vaccination effectiveness, suggesting that officials remain optimistic regarding the trajectory of the economic recovery. Following the news, the Canadian dollar rose nearly 10% against the 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

Endeavour Mining Q1 Earnings: Cash Flow Is King

G Mining Oko West Feasibility: Move Fast, Break.. Nothing?

New Gold Q1 Earnings: What’s Behind The Market’s Surprising Reaction?

Recommended

First Majestic Posts Record Cash Flows In Q1 As Production Costs Fall

Brazil Potash Secures Funding In Support Of US$2.5 Billion Autozales Project

Related News

Bank Of Canada Is Studying Mortgage Relief And Bankruptcy On Unsecured Debt Policies

A research paper written by Soyoung Lee of the Financial Stability Department of Bank of...

Thursday, October 12, 2023, 10:26:00 AM

Tiff Macklem Leaves Rates Untouched, Is Confident Inflation Will Fall ‘Quickly’ In Coming Months

As was widely expected, Bank of Canada Governor Tiff Macklem opted to keep the overnight...

Wednesday, April 12, 2023, 10:23:20 AM

Bank Of Canada Unexpectedly Hikes Key Rate By Full Percentage Point

In a surprising turn of events, the Bank of Canada decided to raise its interest...

Wednesday, July 13, 2022, 11:44:00 AM

More Rate Hikes? Canada’s Unemployment Rate Remains Historically Low

Canada’s labour market remained resilient last month, blowing past economists’ expectations and cementing the case...

Sunday, January 8, 2023, 02:16:00 PM

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