The Bank of Canada held interest rates at current levels and reiterated its commitment to keep them at historic lows to support an economy that’s struggling with a second wave of COVID-19.
In its latest decision, the central bank held its overnight rate at 0.25% and said it would keep it there, probably until 2023. The Bank of Canada also said it would continue to buy Canadian government bonds worth at least $4 billion per week.
Canada’s central bank said it would hold off from making any policy changes until there’s greater clarity on the evolution of COVID-19 and the effectiveness of a vaccine. There was no indication that the Bank of Canada plans to pare back stimulus any time soon, nor signs officials are planning additional measures.
A second wave of COVID-19 has forced political leaders in various hot spots -- including Ontario and Alberta -- to impose stricter measures on businesses. That’s expected to weigh on growth early next year, the Bank of Canada said, and "contribute to a choppy trajectory until a vaccine is widely available."
On recent strength in the Canadian dollar, the Bank of Canada said it’s due to a "broad-based decline" in the U.S. dollar. The Canadian dollar is currently hovering near its strongest level in more than two years. It was little changed at $1.2818 in trading on Wednesday.
