The Globe and Mail reports in its Thursday, June 10, edition that the Bank of Canada left its monetary policy levers unchanged in its latest rate decision. The Globe's Mark Rendell writes that the BOC noted that the pace of vaccinations is setting the stage for a strong economic rebound over the summer, even as the most recent round of lockdowns has dampened business activity in the second quarter.
The BOC kept its overnight policy rate at 0.25 per cent Wednesday, where it has been since March, 2020, and reiterated that it does not expect to hike interest rates until the second half of 2022 at the earliest. Likewise, it maintained its $3-billion-a-week target for government bond buying, also known as quantitative easing, which was in line with expectations.
The BOC said in its decision: "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. Housing market activity is expected to moderate but remain elevated. Strong growth in foreign demand and higher commodity prices should also lead to a solid recovery in exports and business investment."
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