World News – CA – Bank of Canada says second wave of pandemic will achieve near-term growth, keeps rates stable


OTTAWA (Reuters) – Canada’s initial rebound from pandemic-related economic crisis has been stronger than expected, but second wave poised to trigger a « more pronounced short-term slowdown The Bank of Canada said on Wednesday, as it again kept its key rate stable

The central bank has also said it is recalibrating its main asset buying program to shift to longer-term bonds, which it says have a more direct influence on top lending rates for households and businesses

The Bank of Canada now expects a smaller contraction in Canada in 2020, compared to its July update, followed by slower than expected economic growth in 2021 It has not changed its growth prospects for 2022, with economic activity expected to return to pre-pandemic levels early this year

The central bank noted that its projections assume that new outbreaks will be managed by local and targeted containment measures, but said the impacts could be more severe than expected

« There is, however, a serious risk that broader or more intensive restrictions will be needed, » he said in his quarterly monetary policy report

Looking ahead, the Bank of Canada has said it expects quarterly growth patterns to be “unusually volatile” due to localized outbreaks and containment measures, as well as recovery varies from one sector to another

The bank also said it does not expect the output gap to narrow until 2023 It expects headline inflation to stay below its 2% target until 2022

The Bank of Canada says it now sees the Canadian economy contracting by 57% in 2020, then growing 42% in 2021 and 37% in 2022

The Canadian dollar was trading at 13,290 against the greenback, or 7,524 US cents, continuing a slide against its US counterpart as investors worry about increasing cases of coronavirus

Reporting by Julie Gordon, David Ljunggren and Steve Scherer in Ottawa, additional reporting by Fergal Smith in Toronto; Editing by Bernadette Baum

All quotes were delayed for at least 15 minutes See here for a full list of exchanges and delays

Bank of Canada – Bank of Canada, Interest rates, Central Bank, Monetary policy

News from the world – CA – Bank of Canada says second wave of pandemic will reach short-term growth and will keep rates stable



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