Bank of Canada Rate Announcement - October 28, 2020
January 20, 2021 | Posted by: Ken Fadel
The BoC left its target for the overnight rate unchanged today at 0.25%. Furthermore they announced that they will hold the policy interest rate at this level until the slack in the economy is absorbed and their 2% inflation target is sustainably achieved. At this point, they do not see this happening until sometime in 2023.
Employment and GDP numbers were stronger than expected as the economy reopened during the summer. However growth is expected to slow substantially in the fourth quarter of this year as COVID-19 case numbers continue to rise.
After a decline of approximately 5.5% in 2020, the BoC projects the Canadian economy to grow by about 4% percent in 2021 and 2022. This growth is expected to be 'choppy' as consumer and business confidence will continue to evolve with the pandemic.