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Bank of Canada sees 'slow and choppy' recovery

Last Updated Sep 9, 2020 at 7:57 am PDT

The Bank of Canada building is seen in Ottawa, Wednesday, April 15, 2020. Canada's central bank is turning to the public for input on its inflation-rate target that underlies any changes to the bank's trend-setting interest rate. THE CANADIAN PRESS/Adrian Wyld
Summary

The Bank of Canada has left its key interest rate at 0.25 per cent

Central bank says it continues to expect strong reopening phase 'to be followed by a protracted and uneven recuperation'

OTTAWA – The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent and says it will stay there until inflation is back on target.

The central bank’s key rate has remained at its lower effective bound since March when COVID-19 lockdowns plunged the economy into crisis.

In a statement today, the central bank’s governing council says that bounce-back activity in the third quarter looks to be faster than it anticipated in July.

But it warns of indicators like an uneven rebound in employment and subdued business confidence that points to a slow and choppy recovery process.

The bank says its key rate will stay at near-zero until economic slack is absorbed and the two-per-cent inflation target is “sustainably achieved.”

The statement reiterated that the central bank stands ready to do whatever is necessary to aid the economy as it recuperates from the COVID-19 crisis, which will include ongoing purchases of federal government bonds.

Richard Dettman will have more in Business at :26 and :56.