The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent.
The central bank says it will hold the policy interest rate at the effective lower bound until economic slack is absorbed so that the two per cent inflation target is sustainably achieved.
In its statement today, the Bank of Canada says it doesn’t expect inflation to get back on target until some time in 2023.
The central bank also says that it will maintain its quantitative easing program by continuing to buy about $4 billion in bonds per week to try and further reduce interest rates.
The announcement marks the interest last rate decision the central bank will make this year, after an extraordinary 2020 that saw it slash rates in response to the economic crisis caused by COVID-19.
Today also marks a change in the upper echelons of the bank’s leadership, as senior deputy governor Carolyn Wilkins departs after a nearly 20-year career at the Bank of Canada.
The central bank’s board of directors has launched a search process to find her successor as the bank’s second-in-command.
Photo credit: THE CANADIAN PRESS/Adrian Wyld
News source: The Canadian Press