The Bank of Canada (BoC), as expected, it kept monetary policy unchanged. The interest rate was 0.25% after the June meeting and the shopping program in 3 billion Canadian dollars per week. The loonie rose in the market modestly after the decision and the central bank statement.
The BoC indicated that it will keep the rate at the lower limit until idle capacity is absorbed and inflation is on track to a sustainable 2%, which according to current projections will not occur until the second half of next year.
About the shopping program, the BoC affirmed that the decisions will depend on how the governing junta sees the strength and permanence of the recovery. They expect the economy to continue rebounding strongly, led by consumer spending, as vaccination advances and restrictions are lifted.
They estimate that inflation will remain close to 3% in the summer, but they estimate that it will then decline, based on year-on-year comparison effects and due to current overcapacity.
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