The Globe and Mail reports in its Wednesday, June 9, edition that the Bank of Canada has undershot its $3-billion weekly target for government bond purchases in each of the past two weeks.
The Globe's Mark Rendell and David Parkinson write that the BOC bought $2.67-billion and $2.87-billion worth of federal government bonds in the past two weeks. Prior to this, the BOC had hit its $3-billion mark each week since introducing the target in April.
The below-target purchases come after the BOC changed the language in its quantitative-easing program on April 21, going from buying "at least" $4-billion a week to "a target" of $3-billion a week.
That marked the second time the BOC has scaled back the program, in what central bankers call "tapering." Lower weekly bond purchases generally mean the bank is providing less stimulus to the economy.
The BOC says the change gives it greater operational flexibility to manage purchases every week. CIBC analyst
Ian Pollick says the below-target QE purchases may be evidence that the BOC is bumping into increasing resistance securing bond supplies -- a consequence of the huge footprint the bank has in the government bond market after more than a year of the program.
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