Bank of Canada’s Overnight Interest Rate
The Bank of Canada announced that it will continue to hold its key interest rate target at 0.25%, sitting unchanged since March 2020 when a trio of rate cuts were implemented to boost the economy following the hard-hitting impacts of COVID-19. In today’s announcement, the Bank also advised that it is ending its quantitative easing program, which saw the purchase of government bonds to help boost the economy.
Global and Canadian economic recovery is progressing. Vaccination efforts continue world-wide, however the uneven availability and distribution of vaccines, and COVID variants continue to pose risks.
Global demand for goods remains strong, however supply-side constraints are creating a “bottleneck.” This is also the case in Canada, curbing the economy’s productive capacity.
The Bank has downgraded its forecast for global GDP growth to 6.5 per cent this year, 4.25 per cent in 2022 and about 3.25 per cent in 2023.
In Canada, the Bank is projecting economic growth of five per cent in 2021, before moderating to 4.25 per cent in 2022 and 3.75 per cent in 2023.
Bank of Canada’s 2021 Schedule for Policy Interest Rate Announcements
Bank of Canada announces its decision for the overnight rate target eight times a year, typically on a Wednesday. The schedule for 2021 is as follows:
- January 20
- March 10
- April 21
- June 9
- July 14
- September 8
- October 27
- December 8
The next interest rate announcement is scheduled for December 8, 2021. The Bank’s outlook for the economy and inflation, including risks to the projection, will be published in its Monetary Policy Report on January 26, 2022.
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