Bank of Canada could have been clearer about extraordinary measures: review
Written by The Canadian Press on January 17, 2025
OTTAWA — A review by the Bank of Canada of the extraordinary measures it took during the pandemic says the central bank could be clearer in the future in communicating its actions.
In addition to slashing its key interest rate to 0.25 per cent in the early days of the pandemic, the Bank of Canada bought billions worth of bonds to keep financial markets functioning and later to provide monetary stimulus.
The review says the bank could clearer about the limited circumstances under which it would make such large-scale purchases and better describe their specific purpose.
The bank also said if it uses extraordinary forward guidance about where interest rates are headed that it should continually and clearly communicate the conditions under which that guidance would be ended.
It said that in the future the conditions of extraordinary forward guidance could be more clearly tied to the inflation outlook and emphasized more often.
Governor Tiff Macklem says the review will help the central bank be better prepared and more effective should Canada face another similar economic crisis.
This report by The Canadian Press was first published Jan. 17, 2025.
Craig Wong, The Canadian Press