OTTAWA — A senior official at the Bank of Canada says the central bank will be paying close attention to what the post-pandemic economy can supply and what consumers demand.
Deputy governor Toni Gravelle says it’s possible that supply could recover faster than demand if businesses reopen quickly, but consumers remain cautious.
He says it will be key for the bank’s governing council to understand how the pandemic has affected demand, employment and the economy’s capacity to produce goods and services by mid-July.
At that time, the bank will release an updated economic outlook for the country and make its next interest rate announcement.
The Bank of Canada held its key policy rate at 0.25 per cent on Wednesday, but said the economy appears to have avoided a worst-case scenario due to the COVID-19 pandemic.
The bank also reduced some of its market operations after it “cranked up the volume to 11” to allow the banking system to tap directly into much-needed funding liquidity, Gravelle says.
This report by The Canadian Press was first published June 4, 2020.
