Bank of Canada Rate Announcement - September 9, 2020
January 20, 2021 | Posted by: Ken Fadel
The BoC left its key interest rate target unchanged today but hinted at adjusting its government-bond-purchasing programs as the post-lockdown economic rebound has been stronger than expected.
In the statement issued by the central bank, it reiterated its pledge to leave the target for the overnight rate unchanged at 0.25% “until economic slack is absorbed so that the 2-per-cent inflation target is sustainably achieved.” The BoC also stated that going forward its bond-buying program 'will be calibrated to provide the monetary stimulus needed to support the recovery and achieve the inflation objective.'
The BoC also pointed out that the 3rd quarter economic recovery looks quicker than what was expected in July. Having said that, it still expects that “this strong reopening phase to be followed by a protracted and uneven recuperation phase, which will be heavily reliant on policy support.” To that point, inflation is expected to remain well below the 2.00% target in the near term.
The BoC will provide more detail on its policy stance, when it's governor Tiff Macklem, gives the bank's economic outlook via teleconference tomorrow. The speech will be followed by a news conference.