OTTAWA (NEWS 1130) – The Bank of Canada is holding firm on its policy interest rate, keeping it at 0.25 per cent.
The central bank notes that while the global economy is recovering from the COVID-19 pandemic, economic conditions still require the key interest rate to be held.
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.
“In Canada, the economy is proving to be more resilient than anticipated to the second wave of the virus and the associated containment measures,” the Bank of Canada says, noting consumers and businesses have been able to adapt to lockdowns and restrictions.
#Breaking Bank of Canada maintains overnight lending rate at 0.25%
— mike eppel (@eppman) March 10, 2021
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 bank says its key policy rate will stay at 0.25 per cent until the economy recovery, which the Bank of Canada doesn’t see happening until 2023.
We’ll have more in Business at :26 and :56.