Search ForexCrunch

Regarding the Bank of Canada’s (BoC) ongoing asset purchases, BOC  Deputy Governor Toni Gravelle said the Governing Council is evaluating how the process of adjusting these purchases could unfold, as reported by Reuters.

Additional takeaways

“Adjusting the pace of QE purchases won’t necessarily mean that we have changed our views about when we will need to start raising the policy interest rate.”

“Eventually, we will reach a point where the outcomes outlined in our forward guidance have been achieved, then we will need to start raising our policy rate to achieve our inflation objective.”

“We will review extraordinary actions taken in response to the pandemic to assess whether they were calibrated ideally; whether we could do anything differently in future episodes of market stress.”

“We are looking at whether any further structural reforms could be made to improve financial system resilience and minimize the likelihood that extraordinary tools will be needed in the future.”

“We expect our balance sheet to decline to about C$475 billion by the end of April.”

Market reaction

The USD/CAD pair fell sharply following these remarks and was last seen trading flat on the day at 1.2523.