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 Bank of Canada Governor Stephen Poloz repeated that the bank stands ready to augment the scale of any of its programs should market conditions warrant it. This follows the BoC maintaining its target for the overnight rate at ¼ percent at yesterday’s meeting, which the Bank considers its effective lower bound.

Key notes

  • BoC’s Poloz says substantial monetary stimulus needs to be in place to lay the foundation for post-containment economic recovery.
  • BoC’s Poloz says combination of aggressive fiscal action by governments and monetary stimulus by bank will create the best possible foundation for the recovery period.

Meanwhile, yesterday, the Bank also announced new measures to provide additional support to Canada’s financial system.

The Bank of Canada press release

In the lead paragraphs of yesterday’s press release, the BoC wrote, “the necessary efforts to contain the COVID-19 pandemic have caused a sudden and deep contraction in economic activity and employment worldwide. In financial markets, this has driven a flight to safety and a sharp repricing of a wide range of assets. It has also pushed down prices for commodities, especially oil.

In this environment, the Canadian dollar has depreciated since January, although by less than many other currencies. The sudden halt in global activity will be followed by regional recoveries at different times, depending on the duration and severity of the outbreak in each region.”

Read more here

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