Close X
Wednesday, November 27, 2024
ADVT 
National

Bank of Canada holds key rate steady

Darpan News Desk The Canadian Press, 10 Mar, 2021 06:01 PM
  • Bank of Canada holds key rate steady

The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent, saying economic conditions still require it even if things are going better than anticipated.

In a statement, the central bank says it expects economic growth in the first quarter of 2021 to be positive, as opposed to its previous forecast in January for a contraction to start the year.

The bank's senior decision-makers say resilience in the economy has to do with consumers and businesses adapting to new rounds of lockdowns and restrictions.

The statement also points to a stronger-than-expected housing market as a driver of an expected rise in real gross domestic product for the first three months of the year.

But the central bank warns of considerable uncertainty about the path of the pandemic that muddies longer-term economic outlooks, including how long it will take for the labour market to recover from historic losses last year.

The statement from the bank also points to new, more transmissible variants of COVID-19 as the biggest risk to an economic recovery, warning localized outbreaks could "restrain growth and add choppiness to the recovery."

The bank says its key policy rate will stay at 0.25 per cent until the economy recovers and inflation is back at its two per cent comfort zone, which it doesn't see happening until 2023.

The statement from the central bank also says it will continue its quantitative easing program, which is a way for central banks to pump money into the economy.

CIBC senior economist Royce Mendes writes that the communique from the bank fell short of pulling forward the timing of when the economy may heal enough to raise rates, which many experts now believe could occur late next year.

The key policy rate has been at 0.25 per cent for almost exactly one year after the central bank cut rates three times last March at the onset of the COVID-19 pandemic, bringing it to the lower effective bound, meaning the lowest it can go.

The Bank of Canada is scheduled to release its updated economic outlook late next month as part of its quarterly monetary policy report.

MORE National ARTICLES

No time to talk about break with monarchy: Trudeau

No time to talk about break with monarchy: Trudeau
Trudeau says his government won't comment on the Royal Family, though wishes them well.

No time to talk about break with monarchy: Trudeau

Legal challenge against quarantine hotels policy

Legal challenge against quarantine hotels policy
Travellers may leave the hotels once a COVID-19 test taken at their point of entry comes back negative.

Legal challenge against quarantine hotels policy

Opposition parties push for more COVID-19 supports

Opposition parties push for more COVID-19 supports
The Conservatives also want airlines to commit to providing consumer refunds, restrict executive pay and restore regional routes in exchange for repayable loans.

Opposition parties push for more COVID-19 supports

First woman named military's second-in-command

First woman named military's second-in-command
Allen had been seen as a possible contender to take over from Vance as Canada's first female defence chief, before McDonald was selected for the job.

First woman named military's second-in-command

J&J vaccine facing manufacturing issue: Trudeau

J&J vaccine facing manufacturing issue: Trudeau
Canada pre-ordered 10 million doses of the vaccine, which is the first and only one in Canada's vaccine plan that requires only one dose.

J&J vaccine facing manufacturing issue: Trudeau

About 15,000 COVID-19 shots booked in B.C. Monday

About 15,000 COVID-19 shots booked in B.C. Monday
The ministry says only 369 bookings were made in Vancouver Coastal, and officials pledged to work with that health authority to get those bookings "back on track."

About 15,000 COVID-19 shots booked in B.C. Monday