Mortgage Blog

Bank of Canada Rate Annoucement - April 21, 2021

April 21, 2021 | Posted by: Ken Fadel

As the improved outlook for both the domestic economy and the global financial system continue to improve, the BoC today announced that it will keep its target for the overnight rate at 0.25% and will be reducing its net weekly purchases of Government of Canada bonds.

Beginning the week of April 26, weekly net purchases of Government of Canada bonds by the BoC will targeted at $3 billion. This incremental stimulus will continue to be adjusted each week to reflect the progress being made in

In its latest projections, the BoC expects global GDP to grow by approx. 6.75% this year, about 4% next year, and around 3.5% in 2023.

“The recovery in the United States has been particularly strong, owing to fiscal stimulus and rapid vaccine rollouts,” the BoC stated. “The global recovery has lifted commodity prices, including oil, contributing to the strength of the Canadian dollar.”

Despite significant employment gains and stronger than expected economic growth in the first quarter, the BoC warned that “new lockdowns will pose another setback and the labour market remains difficult for many Canadians, especially low-wage workers, young people and women.” 

“As vaccines roll out and the economy reopens, consumption is expected to rebound strongly in the second half of this year and remain robust over the projection,” added the BoC. “Housing construction and resales are at historic highs, driven by the desire for more living space, low mortgage rates, and limited supply. The Bank will continue to monitor the potential risks associated with the rapid rise in house prices.”

The BoC is projecting Canada’s real GDP to grow by 6.5% this year, and then drop to about 3.75% in 2022 and 3.25% in 2023.

The BoC’s next overnight rate announcement is scheduled for June 9th.

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