Bank of Canada keeps interest rate at 0.25 per cent
In Canada, real GDP fell by 11.5 per cent in the second quarter, resulting in a decline of just over 13 per cent in the first half of the year, largely in line with the Bank’s July MPR central scenario. All components of aggregate demand weakened, as expected.
As the economy reopens, the bounce-back in activity in the third quarter looks to be faster than anticipated in July. Economic activity has been supported by government programs to replace incomes and subsidize wages. Core funding markets are functioning well, and this has led to a decline in the use of the Bank’s short-term liquidity programs. Monetary policy is working to support household spending and business investment by making borrowing more affordable.
Household spending rebounded sharply over the summer, with stronger-than-expected goods consumption and housing activity largely reflecting pent-up demand. There has also been a large but uneven rebound in employment. Exports are recovering in response to strengthening foreign demand, but are still well below pre-pandemic levels. Business confidence and investment remain subdued.
CPI inflation is close to zero, with downward pressure from energy prices and travel services, and is expected to remain well below target in the near term. Measures of core inflation are between 1.3 per cent and 1.9 per cent, reflecting the large degree of economic slack, with the core measure most influenced by services prices showing the weakest growth.
As the economy moves from reopening to recuperation, it will continue to require extraordinary monetary policy support. The Governing Council will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 per cent inflation target is sustainably achieved. To reinforce this commitment and keep interest rates low across the yield curve, the Bank is continuing its large-scale asset purchase program at the current pace.
Nigeria Latest News, Nigeria Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Bank of Canada set to reassure markets on low interest rates for years to comeRate decision Wednesday will see central bank brush off stronger\u002Dthan\u002Dexpected rebound and stick to narrative of a long, bumpy recovery
Read more »
Bank of Canada holds key rate steadyBREAKING Bank of Canada holds key interest rate target steady at 0.25 per cent cdnpoli
Read more »
Bank of Canada expected to hold key rate steady amid early stages of recoveryThe Bank of Canada will say this morning what it will do with its key interest rate at a time when there is very little economic drama for the first time in years.
Read more »
Meghan and Archie sue paparazzi over park photos taken of them in CanadaThey claim the photographs represent a misuse of the Duchess and Archie’s private information and are in breach of the Data Protection Act
Read more »