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Bank of Canada to make interest rate announcement amid coronavirus pandemic

Click to play video: 'Coronavirus: Interest rates will remain low ‘for a long time’ Bank of Canada Governor says' Coronavirus: Interest rates will remain low ‘for a long time’ Bank of Canada Governor says
WATCH ABOVE: Bank of Canada Governor Tiff Macklem provided an economic outlook on Wednesday and stated that interest rates will "remain low for a long time" due to a historic drop in economic activity caused by the COVID-19 pandemic – Jul 15, 2020

The Bank of Canada will make its latest interest rate announcement Wednesday and update its outlook for the economy.

The central bank’s key interest rate has been at 0.25 per cent since March when it was dropped in response to the economic fallout from COVID-19.

Read more: Bank of Canada tracking supply, consumer demand for next economic outlook

Governor Tiff Macklem has seemingly ruled out any further drops, adding that the central bank doesn’t plan to raise the rate until well into an economic recovery.

In his first speech as governor late last month, Macklem said the central bank expects to see growth in the third quarter of this year as restrictions ease, but warned of a “prolonged and bumpy” course to recovery.

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The bank will outline what Macklem described as a “central planning scenario” for the economy and inflation, as well as related risks — such as local, but not national, lockdowns.

Click to play video: 'Coronavirus: Bank of Canada Governor says COVID-19 created ‘unprecedented fall in economic activity’' Coronavirus: Bank of Canada Governor says COVID-19 created ‘unprecedented fall in economic activity’
Coronavirus: Bank of Canada Governor says COVID-19 created ‘unprecedented fall in economic activity’ – Jul 15, 2020

The Bank of Canada said in April that it expected inflation to be close to zero in the second quarter.

The federal government’s economic “snapshot” last week pegged inflation at 0.5 per cent for this year, then rising back to two per cent in 2021.

The reading was based on the average of forecasts from 13 private sector economists.

Statistics Canada data showed the consumer price index posted a year-over-year decline of 0.2 per cent in April followed by a drop of 0.4 per cent in May as lockdowns put a damper on consumer spending.
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What you need to know about Canada’s new mortgage rules – Jul 14, 2020

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