Canada Interest Rate1990-2020 Data | 2021-2022 Forecast | Calendar | Historical

The Bank of Canada left its benchmark interest rate unchanged at the effective lower bound of 0.25 percent on July 15th 2020, as widely expected. The Committee said that it will continue its quantitative easing program with large-scale asset purchases of at least CAD 5 billion per week of government bonds. Policymakers noted that the Canadian economy is starting to recover amid the easing of coronavirus restrictions but added that the outlook is extremely uncertain given the unpredictability of the course of the pandemic. The Bank expects the economy’s recovery to slow as the outbreak continues to have an impact on confidence and consumer behaviour. Policymakers projected that the real GDP will likely shrink by 7.8% in 2020 and resumes with growth of 5.1% in 2021 and 3.7% in 2022. The Committee added that is prepared to provide further monetary stimulus as needed to support the recovery and achieve the inflation objective.

The Bank of Canada kept its benchmark interest rate steady at the effective lower bound of 0.25 percent on June 3rd 2020, as widely expected. Policymakers noted that the covid-19 pandemic hit output and employment, still fiscal actions combined with lower interest rates are helping for an economic recovery. The Committee reduced the frequency of its term repo operations to once per week, and its program to purchase bankers’ acceptances to bi-weekly operations and said that it is ready to adjust these programs if market conditions warrant. Meanwhile, other programs to purchase federal, provincial, and corporate debt are continuing at their present frequency and scope. The Committee maintained its commitment to continue large-scale asset purchases until the economic recovery is well underway. Policymakers added that they will take any further action if necessary to achieve the inflation target. The Bank Rate and the deposit rate were also left unchanged at 0.5% and 0.25%, respectively.

The Bank of Canada left its benchmark interest rate unchanged at 0.25 percent on April 15th 2020, as widely expected. Policymakers said that they had taken measures aiming to help restore confidence and stimulate spending by consumers and businesses amid the coronavirus pandemic. The Committee added that they will continue to purchase at least CAD 5 billion in Government of Canada securities per week in the secondary market; they will increase the level of purchases as required to maintain proper functioning of the government bond market and they will temporarily raise the amount of Treasury Bills it acquires. Policymakers also announced a new Provincial Bond Purchase Program of up to CAD 50 billion; and a Corporate Bond Purchase Program, in which the Bank will acquire up to a total of CAD 10 billion in investment grade corporate bonds in the secondary market. The Bank is also enhancing its term repo facility to permit funding for up to 24 months.

The Bank of Canada slashed its benchmark interest rate by 50bps to 0.25 percent in an emergency meeting on March 27th 2020. The move follows a similar margin cut on March 13th and brings borrowing costs to its effective lower bound aiming to support the economy and the financial system amid the coronavirus pandemic. The Committee also launched a Commercial Paper Purchase Program to help to restore a key source of short-term funding for businesses and said that will begin acquiring government securities in the secondary market until the economy recovers. Policymakers added that they are closely monitoring economic and financial conditions, in coordination with other G7 central banks and fiscal authorities and will take further action if necessary.