BoC kept overnight rate target unchanged at effective lower bound of 0.25% as widely expected. Bank rate and deposit rate were held at 0.50% and 0.25% respectively.
Also, the forward guidance on interest rate is maintained. BoC is “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”. And, “this happens sometime in the middle quarters of 2022”.
BoC said recent data suggested that economy had “considerable momentum” into Q4. But, “the devastating floods in British Columbia and uncertainties arising from the Omicron variant could weigh on growth by compounding supply chain disruptions and reducing demand for some service”. BoC expected CPI inflation to remain elevated in the first half of 2022 and ease back towards 2 percent in the second half of the year.
