Canadian News

Bank of Canada holds key lending rate at 0.25%

(AFP)

The Bank of Canada on Wednesday held its key lending rate at a low 0.25 percent, while expressing “increased confidence” in the nation’s economy due to progress fighting the coronavirus pandemic.

The central bank said it was committed to maintaining the rate level until excess production capacity in the economy is absorbed, predicting inflation would return to its target of two percent in late 2022.

Advertisements - Click the Speaker Icon for Audio

“With higher gasoline prices and on-going supply bottlenecks, inflation is likely to remain above 3 percent through the second half of this year,” it said.

“The factors pushing up inflation are transitory, but their persistence and magnitude are uncertain and will be monitored closely.”

The bank now expects GDP growth of about six percent in 2021 — a little slower than previously expected — and has revised up its 2022 forecast to 4.5 percent.

“The third wave of the virus slowed growth in the second quarter,” it said.

“However, falling Covid-19 cases, progress on vaccinations and easing containment restrictions all point to a strong pickup in the second half of this year.”

Related posts

One-armed Canadian amateur golfer hits ace at PGA event

Agence France-Presse

One step at a time: Canadian creates spectacular 'snowshoe art'

Agence France-Presse

Toffoli scores hat trick as Kings surprise Avalanche

Agence France-Presse