Given the situation felt around the globe, the Bank of Canada is taking unprecedented actions even though we are seeing record job losses, a collapse in oil prices and shutdown of most businesses. The world is under extreme financial distress as economies contract around the world.
The Monetary Policy Report said that
“While the global and Canadian economies are expected to rebound once the medical emergency ends, the timing and strength of the recovery will depend heavily on how the pandemic unfolds and what measures are required to contain it. The recovery will also depend on how households and businesses behave in response. None of these can be forecast with any degree of confidence.”
Canada was in a solid economic position before the virus but given the numbers of unemployed people, shuddered businesses and 6 million applications for the Canadian Emergency Benefit program and Covid-19s varied affects across the country, the recovery might be “protracted and uneven”.
Our government and the Bank of Canada have made substantial efforts ease the economic fallout providing money to those who need it and liquidity to financial institutions. The Bank of Canada reduced its prime overnight rate 3 times in the previous months but did not feel that resorting to negative interest rates was appropriate at this time.
Dr. Sherry Cooper writes how the Bank of Canada is ready to do whatever it takes to preserve our countries economy and get us back to a positive functioning society as soon as the pandemic is over. Read further – Bank of Canada Puts The Economy on Life Support http://ow.ly/KXRl30qya7H