(Ottawa) A senior Bank of Canada official says the unusual measures it took during the pandemic helped stimulate the economy, but the bar for resorting to quantitative easing again will be very high.
The comments were made in a speech in Ottawa to the Canadian Association for Business Economics (CABE), as the central bank works to restore public trust and be transparent in its operations.
With the key interest rate already as low as it could be in 2020, Deputy Governor Sharon Kozicki said the central bank decided to start buying more government bonds than usual in the aim of keeping interest rates at a low level.
But Kozicki says the bank faced an unprecedented economic shock when it decided to resort to quantitative easing and the bar for using it again will be very high.
Kozicki says the bank is preparing a thorough review of decisions made during the pandemic so it can learn lessons from its own actions.
The Bank of Canada cut its key interest rate last week by a quarter of a percentage point, to 4.75%. The bank said that if inflation continued to slow, it was reasonable to expect further cuts, but that it was taking one decision at a time.
