The Bank of Canada kept its monetary policy unchanged at its meeting today, Wednesday, issued moments before as the bank kept interest rates at the current levels at 0.25%, as expected, in addition to maintaining the bank’s program of quantitative easing, which is maintained at its current pace of $ 2 billion in the week .
The report issued by the Bank showed that the global economic recovery continues to grow and had strong momentum as the third quarter approaches, but supply chain turmoil is restricting activity in some sectors in addition to the increasing cases of Covid 19, which poses a threat to the strength of the global recovery
In Canada, GDP contracted by about 1% in the second quarter, which is weaker than expected in the bank’s monetary policy report in July and largely reflects the contraction in exports and supply chain disruptions, especially in the auto sector. On the other hand, employment rebounded in June and July with the easing of public health restrictions.
Inflation rates are still higher than 3% as expected, supported by factors considered by the bank to be transient, but their continuation and size are uncertain, while inflation expectations in the medium term remain well fixed.
The Board of Directors of the Bank believes that the recovery in the Canadian economy still requires exceptional support for monetary policy and that the Bank is committed to maintaining interest rates at a minimum until the economic recession is absorbed so that the 2% inflation target is achieved on a sustainable shift.
The Canadian dollar rose after the statement against the US dollar, to test 1.2645 levels, and is now trading at 1.2672 levels, with the opening of the US markets.