Bank of Canada says it’s likely to keep interest rate near zero until 2023

The Bank of Canada says it has no plans to change its benchmark interest rate until inflation gets back to two per cent and stays there, something it says isn’t likely to happen until 2023.

The central bank said Wednesday it has decided to keep its benchmark interest rate steady at 0.25 per cent. The news was expected by economists, as although the economy is showing signs of recovering from the impact of COVID-19, things are still a long way from normal so cheap lending will be needed for a long while yet.

“After a decline of about 5 ½ percent in 2020, the Bank expects Canada’s economy to grow by almost 4 per cent on average in 2021 and 2022,” the bank said. “Growth will likely be choppy [and] influenced by the evolution of the virus and its impact on consumer and business confidence.”

Bank of Canada Governor Tiff Macklem will have more to say about the bank’s line of thinking at a press conference with reporters, slated to begin at 11 a.m. eastern time on Wednesday. That press conference will be streaming live in this story.

More to come

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