The Bank of Canada building is seen in Ottawa, Wednesday, April 15, 2020. THE CANADIAN PRESS/Adrian Wyld

Bank of Canada expected to hold key rate steady amid early stages of recovery

Rate at 0.25 per cent since March

OTTAWA — The Bank of Canada will say this morning what it will do with its key interest rate at a time when there is very little economic drama for the first time in years.

The central bank’s key rate has remained at 0.25 per cent since March when COVID-19 lockdowns plunged the economy into crisis.

Governor Tiff Macklem said in July that the rate would stay at near-zero until the country is well into a recovery and inflation is back at the bank’s two-per-cent target.

Macklem has also said the central bank stands ready to do whatever is necessary to aid the economy as it recuperates from the COVID-19 crisis.

Scotiabank’s Derek Holt noted last week that the statement accompanying the rate announcement may include wording to tamp down any premature enthusiasm for a recovery, or offer guidance on how the bank will measure whether inflation is back in its comfort zone.

Macklem on Thursday is scheduled to speak to the Canadian Chamber of Commerce about the uneven effects the COVID-19 pandemic has had on different sectors and groups of people.

This report by The Canadian Press was first published Sept. 9, 2020.

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