Bank of Canada Governor Tiff Macklem takes part in a news conference at the Bank of Canada in Ottawa on December 15, 2020. Canada’s central bank will update its economic forecast for the country that will offer a window when it expects a recovery from the COVID-19 pandemic to take hold. THE CANADIAN PRESS/Sean Kilpatrick

Bank of Canada Governor Tiff Macklem takes part in a news conference at the Bank of Canada in Ottawa on December 15, 2020. Canada’s central bank will update its economic forecast for the country that will offer a window when it expects a recovery from the COVID-19 pandemic to take hold. THE CANADIAN PRESS/Sean Kilpatrick

Bank of Canada keeps key interest rate target on hold at 0.25%

The central bank is citing the economic conditions and ongoing uncertainty

The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent.

The central bank is citing the economic conditions and ongoing uncertainty from the pandemic as reasons for its decision.

It also says that the earlier-than-anticipated arrival of vaccines has reduced economic uncertainty from “extreme levels.”

Still, the bank says today it expects the Canadian economy to contract in the first quarter of 2021.

The bank forecasts real gross domestic product will decline by 2.9 per cent in the first quarter of the year compared to the same period in 2020, before improving thereafter if severe restrictions start easing in February.

The bank is forecasting growth of four per cent this year, then 4.8 per cent next year, and finally 2.5 per cent in 2023.

This report by The Canadian Press was first published Jan. 20, 2021.

The Canadian Press

economy

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A nurse performs a test on a patient at a drive-in COVID-19 clinic in Montreal, on Wednesday, October 21, 2020. (THE CANADIAN PRESS/Paul Chiasson)
30 new COVID-19 cases, five more deaths in Interior Health

This brings the total number of cases to 7,271 since testing began

FILE – A COVID-19 vaccine being prepared. (Olivia Sullivan/Sound Publishing)
B.C. seniors 80 years and older to get COVID vaccine details over next 2 weeks: Henry

Province is expanding vaccine workforce as officials ramp up age-based rollout

The future of the Cache Creek pool is still up in the air as council ponders different options and cost considerations. (Photo credit: <em>Journal</em> files)
No decision about whether Cache Creek pool will open in 2021

Council still discussing pool’s future; no date set for public meeting about its fate

More people at home during the pandemic is probably one of the reasons for a spike in water usage in Ashcroft in 2020. (Photo credit: Pixabay)
Ashcroft residents urged to conserve water after usage spike in 2020

Water consumption in 2020 increased by 14 per cent over previous year

Sandbagging materials outside an Emergency Operations Centre in Cache Creek in April 2020, after flooding prompted several evacuation alerts and orders in the community. (Photo credit: Barbara Roden)
Cache Creek council asks for more info about alert system

Decision about joining emergency notification system deferred to next meeting

Dr. Bonnie Henry talk about the next steps in B.C.'s COVID-19 Immunization Plan during a press conference at Legislature in Victoria, B.C., on Friday, January 22, 2021. THE CANADIAN PRESS/Chad Hipolito
456 new COVID-19 cases in B.C., 2 deaths

Since January 2020, 78,278 have tested positive for the novel coronavirus in B.C.

A health-care worker prepares a dose of the Pfizer-BioNTech COVID-19 vaccine at a UHN COVID-19 vaccine clinic in Toronto on Thursday, January 7, 2021. (THE CANADIAN PRESS/Nathan Denette)
Vaccinating essential workers before seniors in B.C. could save lives: experts

A new study says the switch could also save up to $230 million in provincial health-care costs

The late Michael Gregory, 57, is accused of sexually exploiting six junior high students between 1999 and 2005. (Pixabay)
Former Alberta teacher accused of sexually assaulting students found dead in B.C.

Mounties say Michael Gregory’s death has been deemed ‘non-suspicious’

According to a new poll, a majority of Canadians want to see illicit drugs decriminalized. (THE ASSOCIATED PRESS)
Majority of Canadians think it’s high time to decriminalize illicit drugs: poll

More than two-times the B.C. residents know someone who died from an overdose compared to rest of Canada

Interior Health officially declared a COVID-19 outbreak at Creekside Landing in Vernon on Jan. 3, which was followed by the first death from the virus 10 days later. (Kaigo photo)
COVID outbreak over at Vernon care home

Creekside Landing cleared of coronavirus, despite additional death in last day

(Black Press Media file photo)
B.C. residents can reserve provincial camp sites starting March 8

B.C. residents get priority access to camping reservations in province

Two women were arrested in Nanaimo for refusing to wear masks and causing disturbance on a BC Ferries vessel. (File photo)
B.C. ferry passengers arrested and fined for disturbance, refusing to wear masks

Police said woman threatened their pensions in Feb. 21 incident aboard Nanaimo-bound boat

When his owner had knee surgery, Kevin, 2, was able to continue to go for walks thanks to volunteers from Elder Dog Canada. (Contributed photo)
B.C. woman has nothing but praise for Elder Dog Canada

National organization has a fleet of volunteer walkers ready, but needs more clients to serve

Most Read