UPDATE 3-Bank of Canada sees rates unchanged until 2023, shifts bond buying to longer maturities

  • 10/28/2020
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(Recasts with Macklem’s comments from press conference) OTTAWA, Oct 28 (Reuters) - The Bank of Canada said on Wednesday it expects interest rates to remain at current record lows into 2023, as it shifted its asset purchase program to focus on long-terms bonds and warned of a “long slog” towards a post-pandemic recovery. The central bank, in an update of its economic projections, also said a second wave of coronavirus infections would have a pronounced effect on Canada’s near-term growth. New infections have surged in recent weeks leading to targeted restrictions. The BoC held its key overnight interest rate at 0.25%, as expected, and reduced its bond-buying program to C$4 billion per week from C$5 billion. It also tweaked that program towards longer-term bonds to help it provide as much stimulus as before. “If you are a household considering making a major purchase, if you’re a business considering investing, you can be confident that interest rates will be low for a long time,” Governor Tiff Macklem told reporters at a press conference.

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