For the sixth time in a row, the Bank of Canada has announced* that it is keeping its key policy interest at 0.25 per cent. The Bank expects the rate to remain at this level until 2023.

The Bank also announced that it will maintain its quantitative easing program at its current pace of at least $4 billion per week.

“The earlier-than anticipated arrival of effective vaccines will save lives and livelihoods, and has reduced uncertainty from extreme levels. Nevertheless, uncertainty is still elevated, and the outlook remains highly conditional on the path of the virus and the timeline for the effective rollout of vaccines.”

The Bank is forecasting that the second wave of the virus and related lockdown measures will push Canada’s GDP back into negative territory in the first quarter of 2021. If the tighter public health restrictions are lifted before the end of the March, GDP is expected to rebound strongly in the second quarter.

“Beyond the near term, the outlook for Canada is now stronger and more secure than in the October projection, thanks to earlier-than-expected availability of vaccines and significant ongoing policy stimulus. After a decline in real GDP of 5.5 per cent in 2020, the Bank projects the economy will grow by 4.0 per cent in 2021.”

*Each year, the Bank of Canada sets eight fixed dates on which it announces whether or not it will change its policy interest rate. The next announcement is scheduled for March.

Answer to the previous trivia question: The economic opening of China (a.k.a. socialism with Chinese characteristics) began on December 18, 1978.

Today’s trivia question: In what year did the Bank of Canada stop issuing $1,000 bills?