The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent and says it will stay there until inflation is back on target.
The central bank’s key rate has remained at its lower effective bound since March when COVID-19 lockdowns plunged the economy into crisis.
In a statement on Wednesday, the central bank’s governing council says that bounce-back activity in the third quarter looks to be faster than it anticipated in July.
But it warns of indicators like an uneven rebound in employment and subdued business confidence that points to a slow and choppy recovery process.
The bank says its key rate will stay at near-zero until economic slack is absorbed and the two-per-cent inflation target is “sustainably achieved.”
The statement reiterated that the central bank stands ready to do whatever is necessary to aid the economy as it recuperates from the COVID-19 crisis, which will include ongoing purchases of federal government bonds.