The Bank of Canada (BoC, its acronym in English) said on Wednesday 8 that it was maintaining its base interest rate at 0.25% per annum. The volume of weekly bonus purchases in its quantitative easing (QE) program also follows the same, at C $ 2 billion.
In the latest monetary decision, released in July, QE had already been reduced from C $ 3 billion to C $ 2 billion per week.
“We remain committed to keeping the base interest rate at the effective lower limit until the economic downturn is absorbed, so that the 2% inflation target can be reached on a sustainable basis,” says BoC in a note. In the July projections made by the bank, this should happen in the second half of 2022.
According to the BoC assessment, the global economic recovery continued in the second quarter, driven by strong US growth, and is progressing solidly in the third quarter. However, supply chain disruptions are limiting activity in some sectors, and rising covid-19 cases in many regions pose a risk to the strength of the global recovery, notes BC Canada. “Financial conditions remain very accommodating,” he said.
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