Bank of Canada deputy governor says bar for using QE again will be very high

By The Canadian Press on June 13, 2024.

OTTAWA – A senior Bank of Canada official says the unusual measures it took during the pandemic helped boost the economy, but the bar for using quantitative easing again will be very high.

The comments came in a speech in Ottawa to the Canadian Association for Business Economics as central bank works to rebuild trust with the public and be transparent in how it works.

With its key policy interest rate already as low as it could go in 2020, deputy governor Sharon Kozicki says the central bank decided to start buying more government bonds than usual in a bid to keep interest rates low.

But Kozicki says the bank faced an unprecedented economic shock when it decided to use quantitative easing and the bar for it to use it again will be very high.

Kozicki says the bank is putting together an in-depth review of the decisions taken during the pandemic so that it can learn from its own actions.

The Bank of Canada cut its key interest rate last week by a quarter of a percentage point to 4.75 per cent. The bank has said if inflation continues to ease it is reasonable to expect further cuts, but that it is taking it one decision at a time.

This report by The Canadian Press was first published June 13, 2024.

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