Bank of Canada has no immediate intentions to raise interest rates, Macklem says

Rates would only go up once Canada is well into an economic recovery

Canada’s new top central banker says the Bank of Canada has no intention to raise interest rates given the current economic circumstances created by the COVID-19 pandemic.

Governor Tiff Macklem says the central bank is focused on delivering low interest rates for the foreseeable future to support an economic recovery.

That should also help lower the debt-servicing costs households and businesses face, he says, particularly if they’ve taken out loans to bridge to better times.

Rates would only go up once Canada is well into an economic recovery, which Macklem suggests is still a long way off.

The Bank of Canada has dropped its key interest rate to 0.25 per cent, which it says is as low as it can go, and gone on an unprecedented bond purchasing program to ease credit flows in financial markets.

Macklem made the comments during his first appearance as governor before the House of Commons finance committee — his first public statement since taking the top job on June 3.

“Some day we will get through this, the economy will be recovered and interest rates will start to move back to more normal levels,” Macklem said Tuesday.

“But we’re in a deep hole, and it’s going to be a long way out of this hole.”

During his appearance, Macklem said the bank’s focus in the initial weeks of the crisis was on restoring orderly market conditions, efforts that seem to be paying off with conditions normalizing.

He says the bank is now turning its focus to the future path of monetary policy, with an important step to be taken next month with the publication of an economic outlook.

The bank’s July monetary policy report will likely again provide best- and worst-case scenarios for the economy rather than hard figures for gross domestic product and inflation because of the unknown course of the pandemic, Macklem says.

He adds the report will also have a discussion about possible risks facing the economy and for the bank in hitting its target inflation rate.

The results of the report will help determine how much monetary stimulus will be needed and for how long, Macklem says.

He also says he expects to see growth in the third quarter of the year given the growth of 290,000 jobs recorded in May, as well as more people looking for work and more working regular hours.

“I think could see some good numbers (in the third quarter), but I would stress that even the good case is still pretty bad,” Macklem said.

The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

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

Just Posted

Annual Thanksgiving Food Drive garnishes generous portions

Food donations will sustain the Prince Rupert Food Bank for three months.

Unofficial holidays: Here’s what people are celebrating for the week of Sept. 27 to Oct. 3

World Farm Animals Day, Drink Beer Day and Virus Appreciation Day are all coming up this week

Haida hereditary chief is BC Liberal Candidate for North Coast Region

Roy Jones Jr. is named BC Liberal MLA candidate for the North Coast

$3.4 million childcare centre to be built in Lax Kw’alaams

Lax Kw’alaams funding has been approved through the provincial New Spaces Fund

COVID-19 cases grow to 13 at B.C. First Nation near Fort St. James

“This is very serious,” says Nak’azdli Whut’en Chief

QUIZ: Do you know what’s on TV?

Fall is normally the time when new television shows are released

Canadian ski resorts wrestle with pandemic-vs.-profit dilemma as COVID-19 persists

Few are actually restricting the total number of skiers they allow on the hill

Victoria-area RCMP locate high-risk sex offender thanks to help of taxi cab driver

Scott Jones wanted on a Canada-wide warrant, ‘a risk to women and girls,’ police say

A (virtual) walk around the world by 88-year-old B.C. man

George Doi says it’s simple: ‘I like walking’

End of CERB means uncertainty for some, new system for others

As of a week ago, the CERB had paid out $79.3 billion to 8.8 million people

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Horgan, Wilkinson trade barbs over MSP premiums, health care at campaign stops

Horgan called a snap election for Oct. 24 earlier this week

PHOTOS: 2nd calf in a month confirmed among Southern Resident killer whale pod

Center for Whale Research said they will eagerly await to observe the calf to evaluate its health

Most Read