BoC left monetary policy unchanged as widely expected. Overnight rate is held at effective lower bound of 0.25%, with Bank Rate at 0.50% and deposit rate at 0.25%. QE program is maintained at a target pace of CAD 2B per week. Also BoC will hold interest rate at current level at least until second half of 2022.
The central bank “continues to expect the economy to strengthen in the second half of 2021, although the fourth wave of COVID-19 infections and ongoing supply bottlenecks could weigh on the recovery.” The factors pushing inflation are “expected to be transitory”, but “their persistence and magnitude are uncertain and will be monitored closely”.
