OTTAWA (Reuters) -The Bank of Canada on Wednesday left its key interest rate unchanged at a record low 0.25%, as expected, and said the economy would “rebound strongly” as vaccinations against COVID-19 picked up.
The central bank said it would also maintain its current policy of quantitative easing. It is aiming to buy C$3 billion of government bonds a week as part of attempts to help the recovery from the damage caused by the pandemic.
In a regular rate decision statement, the bank reiterated its guidance that rates would remain unchanged until at least the second half of 2022, noting that there remained considerable excess in the economy.
“With vaccinations proceeding at a faster pace, and provincial containment restrictions on an easing path over the summer, the Canadian economy is expected to rebound strongly, led by consumer spending,” it said.
Overall inflation would likely remain at 3% through the summer, above the bank’s 2% target, before easing later in the year, it added.
Reporting by David Ljunggren and Julie Gordon in OttawaEditing by Chizu Nomiyama
