The Bank of Canada announced on Wednesday that it will be keeping interest rates steady as the economy is predicted to rebound in 2021-2022.
Overnight rates and deposit rates are being maintained at 0.25 per cent, while the Bank Rate remains at 0.50 percent.
The Bank says that both global and Canadian economic outlooks have unfolded largely along the lines they anticipated based on the July Monetary Policy Report.
Rapid expansions from economies reopening gradually gave way to slower growth, and the Bank says that rising COVID-19 infections are likely going to hamper the economic outlook in many countries, with growth reliant on public policy support.
They predict that global GDP will contract by about 4 per cent in 2020 before growing an average of 4.5 per cent in 2021 and 2022.
In Canada, most commodities have fully recovered, however oil prices remain about 30 per cent below pre-pandemic levels.
Low-income workers have been particularly hard-hit by the pandemic, and the Bank says that “extraordinary monetary policy support” will be needed to help the economy recuperate.
“We are committed to providing the monetary policy stimulus needed to support the recovery and achieve the inflation objective,” the Bank of Canada said in a statement.