Bank of Canada keeps key rate at 0.25%, upgrades economic forecast

By Staff The Canadian Press

Posted June 3, 2020 10:14 am EST

Updated June 3, 2020 11:15 am EST

1 min read

This article is more than 3 years old and some information may not be up to date.

Finance Minister Bill Morneau announced Tiff Macklem as the new governor of the Bank of Canada during a press conference in Ottawa on Friday. Macklem is the dean of the business school at the University of Toronto is a former senior deputy governor of the bank. Macklem will replace Stephen Poloz whose seven-year term expires in June – May 1, 2020

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

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The central bank says the impact of the pandemic on the global economy appears to have peaked, although uncertainty about how the recovery will unfold remains high.

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The bank say it believes Canada has avoided the worst-case economic scenario painted that it painted in April, updating its GDP figures for the second quarter of the year.

It now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019, down from the 15 to 30 per cent decline forecasted in April.

In a statement announcing the rate decision, it also says it still expects the economy to resume growth in the third quarter.