October 28, 2020, by Pete Evans
The Bank of Canada says it has no plans to change its benchmark interest rate until inflation gets back to 2% and stays there, something it says isn’t likely to happen until 2023. The central bank said it has decided to keep its benchmark interest rate steady at 0.25%.
The central bank says it expects Canada’s economy will shrink by 5.7% this year, but grow by 4.2% next year, and 3.7% in 2022. Inflation, meanwhile, is expected to be 0.6% this year, 1.0% next year, and 1.7% in 2022.
Those growth and inflation projections, however, are based on two leaps of faith: that there won’t be a second â€” or third â€” widespread lockdown in Canada, and that a vaccine or some sort of effective treatment will be widely available by the middle of 2022 at the latest.
Bank of Canada plans to keep interest rate near zero until 2023
What does this mean?
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