Tue, 02 Mar 2021

Bank of Canada continues rate unchanged at 0.25 pct

21 Jan 2021, 02:55 GMT+10

OTTAWA, Jan. 20 (Xinhua) -- The Bank of Canada announced Wednesday to keep its key interest rate unchanged at 0.25 percent.

The Canadian central bank said its decision to keep the rate unchanged is based on the economic conditions and ongoing uncertainty from the COVID-19 pandemic in the country.

The bank reiterated its pledge to keep the rate unchanged until the economic recovery is well underway.

It cut its rate a few times to the current 0.25 percent due to the strong impact of the COVID-19 pandemic starting last February.

The bank said the outlook for Canada is now stronger and more secure than in the October projection, thanks to the earlier-than-expected availability of vaccines and significant ongoing policy stimulus.

"Canada's economy had strong momentum through to late 2020, but the resurgence of cases and the reintroduction of lockdown measures are a serious setback," the bank said in a statement.

"Growth in the first quarter of 2021 is now expected to be negative," the bank said, expecting that GDP will shrink by 2.9 percent in the first quarter of this year compared to the same period in 2020.

The bank forecast the country's economic growth of 4 percent this year, 4.8 percent in 2022, and 2.5 percent in 2023.

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