Bank of Canada surprises by announcing the end of its acquisition plan

The Bank of Canada The announcement this Wednesday has taken the market by surprise The end of its size expansion plan Thanks to the recovery of the country’s economy, the first half of 2022 brought forward a rise in interest rates, which is currently 0.25%. But for now, the Canadian Monetary Authority will set interest rates of 0.25% at the onset of epidemics because the “high potential” of the Canadian economy continues to require “substantial policy support. Monetary”.

The central bank said in a statement that it was committed to keeping interest rates in the low range until the recession subsides. The 2% inflation target can be reached consistently“.

The Finance Commission has explained that The country’s economic recovery has made it possible to end the size expansion plan, With the Bank of Canada buying up to CAD5 billion (US $ 4.049 billion) in government securities each week. The company’s governor, Tiff McClellan, when announcing the measures, revealed that the rate of expansion has been “gradually slowing down” since last October, thanks to the progress of the country’s economic recovery.

“As the economy grows stronger again, the Governing Body (Bank of Canada) estimates that easing the size is no longer necessary,” McClellan said. So, the program will be replaced by a The “reinvestment phase” in which you buy government securities Only for replacing expired ones.

The bank forecasts that the Canadian economy will grow by 5% this year, 4.25% in 2022 and 3.75% in 2023. It also warned that inflation in Canada would be higher than initially predicted in the coming months. 2% target until the end of 2022.