BoC surprisingly announced to end quantitative easing today, and move to the reinvestment phase. That’s ahead of market expectation of tapering today and ending QE in December. Overnight rate is held at effective lower bound of 0.25%, bank rate is kept at 0.50% and deposit rate at 0.25%.
Regarding forecast guidance, BoC reiterated that its “remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2 percent inflation target is sustainably achieved.”
Now, BOC expects this to happen “sometime in the middle quarters of 2022″, ahead of September’s guidance of ” the second half of 2022.”
