Canada Maintains Base Interest Rate at 0.25%... "Until Economic Recovery"

[Asia Economy Reporter Yujin Cho] On the 9th (local time), the Bank of Canada, the central bank of Canada, announced that it will maintain the benchmark interest rate at the current 0.25%.

The Bank of Canada held a regular monetary policy meeting on the day and stated that due to economic lockdown measures caused by COVID-19, the economic situation in the second quarter has contracted, making it necessary to continue stimulus measures.

The Bank of Canada also announced plans to maintain the weekly government bond purchase scale of 3 billion Canadian dollars (approximately 2.8 trillion KRW), continuing its quantitative easing policy.

The statement noted that although the first quarter growth rate of 5.6% fell short of the initial forecast of 7%, it was evaluated as a "solid performance." It also explained, "Looking at the fundamental details, there is an increase in confidence and demand recovery," adding, "Household consumption is more active than expected, and corporate inventory reduction and import increases are better than anticipated."

Furthermore, it projected the economic recovery period to be after the second half of next year and stated that no interest rate hikes are expected until the recovery period.

The Bank of Canada said, "Vaccination is accelerating, and provincial governments' economic lockdown measures are expected to ease during the summer," adding, "As a result, increased consumer spending is expected to lead to a strong economic rebound."

It also forecasted, "The housing market is expected to maintain a moderate upward trend," and "Exports and corporate investment will recover solidly due to strong overseas demand and rising commodity prices."