Tag Archives: Bank of Canada

Head of Bank of Canada Says Significant Stimulus Needed to Rebuild the Economy | Instant News


OTTAWA – The Bank of Canada anticipates providing a large enough stimulus to the economy in the future to help the country rebuild from the damage caused by the pandemic, Governor Stephen Poloz said Monday.

He said he believed the Canadian economy was in a position to “get rid” of the worst of the virus, because it was in a healthy position before the pandemic. To contain the spread of the new corona virus, authorities here and elsewhere impose restrictions on economic activity. The ranks of the unemployed have swollen, and the data …

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Opinion: The death of cash is a problem for the Bank of Canada | Instant News


Cash is a cheap alternative to credit cards.

Ryan Remiorz / The Canadian Press

Barry R. Campbell is a former member of Parliament and is now a corporate lobbyist in financial services and other sectors.

In ancient times Twilight Zone episode, a bank robber steals cash and himself is cryogenically frozen. One hundred years later, waking up as programmed, his crimes long forgotten, he dug up his savings and tried to finish them. Nobody will take it.

Exasperated, he headed to the bank and boldly tried to deposit a stack of bills. “What is this?” a confused teller asked. “This is cash!” said a rather impatient bank robber. “Cash?” Said the cashier. “It hasn’t been used for decades. Sorry, it’s not worth it.”

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The day without cash is with us. We don’t have to freeze to know that – just scared.

As the COVID-19 virus develops, infectious disease specialists warn that the virus can stick to the surface. “This may include hard currency,” said one. If you haven’t been sick of handling money and coins, the warning is most likely suitable for you.

Some retailers announced that they would no longer accept cash. The Bank of Canada is pushing back, urging retailers to accept cash even when the government asks Canada to limit physical interaction. “Refusing to buy cash will burden those who depend on cash and have limited payment options,” the Bank of Canada warned.

Even before the pandemic, the Bank of Canada vigorously retained cash. “Old and simple payment technology,” the Bank acknowledged, but was widely accepted. Safe cash, legal payment instrument with a stable value. This protects privacy because it can be used without revealing your personal financial information or information. And it is a cheap alternative to credit cards.

The Bank of Canada has defended cash as important for “financial inclusion” and “social utilities” for people who have difficulty accessing alternative payment methods such as credit cards. Banks also have a monopoly in issuing goods, and that monopoly is the key to controlling monetary policy.

One can praise the goodness of paper currency and believe it is superior to some subtle digital things. But an invisible virus makes you question the wisdom of handling money, even if you violate quarantine to reach an ATM or bank. In the COVID-19 crisis, the use of cash has declined. Tap – contactless payment via credit and debit cards – has become the king of where the cash used to be.

For young demographics, money has long been an ancient relic – something your grandmother put on your birthday card. For others, switching to alternatives (such as card taps or digital currencies) may have been accelerated in direct proportion to the perceived risk of infection. Before the COVID-19 pandemic, the central bank began to modernize cash by replacing old banknotes with polymer paper money which was said to be washable and more difficult to fake.

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However, cash usage has declined, with more and more people switching to credit and debit cards. But before the crisis, the Bank of Canada was haunted by something else: the explosion of personal digital currencies. Not volatile cryptocurrency like bitcoin, but other digital assets called “stable” which are more stable (as implied by monikers cleverly) and are often supported by currency ownership.

Facebook Libra is an example. Because of the reach of the Facebook platform, it is feared Libra can be widely adopted and change traditional money and payments.

But now, the Bank of Canada’s plan from just a few months ago to promote the use of cash to maintain control over monetary policy and support financial inclusion, while only “thinking” about issuing the central bank’s digital currency, is likely to be reviewed.

The bank has indicated that there are two scenarios that will cause it to consider issuing its own digital currency: when cash can no longer be used for a wide variety of transactions and the widespread use of personal digital currencies. These two justifications meet and the contingencies planned by the Bank are looming certainty.

Bank of Canada will need to launch its own digital currency – and soon – or risk losing control of monetary policy. This is not a computer virus that interferes with a personal digital currency that will force the bank’s hand, but a virus that actually turns our relationship into cash.

Strangely, while the novel coronavirus might destroy cash, Canadian banks have reported stable cash withdrawals at ATM machines during the pandemic. People who plan the end of the world, or “preppers,” and want to fill their mattresses with banknotes? Maybe.

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Most likely, for many people, cash is not only the preferred payment method, but their only payment method. Financial inclusion for all may require the government to find out how these people are not left behind when cash runs out.

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The Bank of Canada will do its part to support a lasting recovery from coronavirus: Wilkins | Instant News


FILE PHOTOS: Bank of Canada Senior Deputy Governor Carolyn Wilkins poses for photos after an interview with Reuters in Montebello, Quebec, Canada, February 8, 2018. REUTERS / Chris Wattie / Photo File

OTTAWA (Reuters) – The Canadian central bank will do its part to help bridge the economy through the coronavirus pandemic while standing ready to adjust its asset purchases to support a sustainable recovery, said Bank of Canada Senior Deputy Governor Carolyn Wilkins on Monday.

In a brief speech outlining overnight interest rate cuts and quantitative easing programs that have been launched by banks since the crisis began in mid-March, Wilkins did not mention future steps. The Canadian economy has also been hit hard by falling oil prices.

However, he repeated the central bank could adjust its asset purchase program if needed to stimulate the economy rather than use it only to increase financial market liquidity.

“The bank will do its part to bridge this period and support sustainable recovery,” said Wilkins, who was at the forefront of the bank’s message about its quantitative easing program.

“Such a change in tactics will eventually be needed, with unemployment likely to remain high even after the economy begins to reopen,” Royce Mendes, senior economist at CIBC, said in a note.

Statistics Canada will release Canadian employment data in March on Friday, which is expected to break records. More than 7.2 million people have proposed some form of emergency unemployment assistance since the crisis began, Canadian government data showed.

Monday’s speech marked the first time Wilkins, 56, has spoken in public since he was passed for the top post of the Bank of Canada in support of longtime central bank Tiff Macklem.

Macklem was named governor of the 10th Bank of Canada on Friday and will begin his new role on June 3 – the same day the bank will release the next key interest rate decision. Many market observers see Wilkins as a leader in this role.

Reporting by Kelsey Johnson, additional reporting by Fergal Smith in Toronto; Editing by Tom Brown

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Bank of Canada stimulus measures must reach the Canadian average: Stephen Poloz – National | Instant News


Canada’s top banker said monetary stimulus on the scale seen by the country now finally has to reach the Canadian average to help economic recovery from COVID-19 crisis.

In a speech late Thursday, Bank of Canada governor Stephen Poloz said the recovery was from now economical Crisis needs monetary policy to play a very important role for the public health easy restriction.

But for the recovery to really take off, stimulus measures need to “reach the main borrowers,” Poloz said.

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In the text of his speech posted on linePoloz points to how long-term mortgage rates “stick” after the Bank of Canada lowers its overnight interest rate target “because banks are still funding themselves at relatively steep levels in the bond market.”

Speaking to the Ivey School of Business in London, Ontario, today, Poloz recalled the importance of the economic shocks that struck him during the global meeting of central bank governors on March 8, where the governors of China, Italy and South Korea detail their experiences.

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Coronavirus Outbreak: Bank of Canada keeps interest rates steady as the economy sees “significant contraction”


Coronavirus Outbreak: Bank of Canada keeps interest rates steady as the economy sees “significant contraction”

“I also attended a memorial service for a friend that day. That is my last social activity, and we are afraid to shake hands or touch food, “said Poloz.

“I will always remember the warning service of my good friend, Jim, when that moment really went down.”

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Since then, the central bank has cut interest rates from 1.75 percent to 0.25 percent, which is basically as low as that can be achieved.

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It has also carried out an unprecedented bond purchase program to pump liquidity on the financial markets.

The bank has also refused to place specific figures on economic prospects, citing uncertainty about how quickly public health officials can overcome a pandemic.










Coronavirus worldwide: April 30, 2020


Coronavirus worldwide: April 30, 2020

Poloz said the comparison to past decreases was “not helpful, because they used arithmetic to compare events that had very different effects on people.”

He said the situation today was more similar to natural disasters than depression with fiscal policy in place “basically stopping time and then restarting” the economy.

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Poloz said the central bank will continue to monitor to avoid rapid inflation during the recovery.

“We are aware of this risk and have the tools to respond if it materializes. But now we see the risk of disinflation more quickly, “he said.










Coronavirus Outbreak: Singh says the liberal government must increase student benefits amid a pandemic


Coronavirus Outbreak: Singh says the liberal government must increase student benefits amid a pandemic

© 2020 The Canadian Press

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The Canadian dollar slipped on concerns that storage is hitting oil prices | Instant News


The Canadian dollar linked to oil weakened against the greenback on Monday as US crude oil prices slipped to record lows below zero, with the loonie posting the second largest decline among the G10 currencies.

At 3:29 pm, the Canadian dollar was trading 1 percent lower at 1.4115 to the greenback, or 70.85 US cents. Currencies are traded in the range of 1.4020 to 1.4137.

Among the G10 currencies, only the Norwegian Krone lost more. Canada and Norway are the main oil producers.

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“The main story is just the story of oil,” said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. “This of course has made CAD wrinkled for today and maybe also for tomorrow.”

“North American oil is traded with more problems than oil for shipping elsewhere,” Anderson said.

Next month’s contract for US crude, which expires on Tuesday, settled at $ 55.90 lower at minus $ 37.63 a barrel, after turning negative for the first time in history as a decline in storage space that discouraged buyers .

Brent crude fell 8.9 percent to $ 25.57.

Meanwhile, the Canadian province of Ontario estimates 20,000 new cases of corona virus by the end of the month, a quarter of the number projected just three weeks ago. But the country’s chief medical officer warned that it was not yet time to ease quarantine measures.

Authorities in Canada have ordered the closure of businesses that are not important, leaving millions of people out of work.

Ottawa unveiled more than C $ 200 billion in economic support measures, while the Bank of Canada has cut interest rates by 150 basis points since March and began buying Canadian government bonds.

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Last week, the central bank said it would expand its asset purchase program, or quantitative easing, to include provincial and corporate debt.

Yields on Canadian government bonds varied across the curve on Monday, with a 10-year drop of less than one basis point to 0.638 percent.

Canadian wholesale trade increased 0.7 percent in February from January due to stronger sales in the motor vehicle subsector and vehicle parts and accessories sub-sector, Statistics Canada said. Analysts expected a 0.5 percent decline.

In separate data, the Teranet-National Bank Composite House Price Index showed prices of single-family homes rose 0.6 percent in March from February.

Canada’s inflation report for March is due on Wednesday.

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Bank of Canada Leaves Key Interest Rate Unchanged | Instant News


OTTAWA – The Canadian bank left its main interest rate unchanged Wednesday and said it will start buying provincial and corporate bonds, warning that the short-term decline in output in the Canadian economy could be the biggest on record.

Bank of Canada Governor Stephen Poloz said at a press conference the Canadian economy experienced “significant and rapid contraction” as a result of the new coronavirus pandemic, which has led to widespread business closures, and a decline in global oil prices. “In the near future, policy …

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Coronavirus: Bank of Canada establishes the impact of COVID-19 on the economy – National | Instant News



The Canadian central bank will make an announcement today regarding its key interest rates and detail its impact COVID-19 on the national economy.

The bank has been cutting interest rate-setting trends since early March, including two unscheduled cuts as an emergency measure against the collapse of the pandemic economy.

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There are general expectations among economists that the Bank of Canada will maintain its “overnight rate” target at 0.25 percent.

At the same time, the central bank will also release its views on the economic impact of COVID-19 and the domestic economic outlook a day after the International Monetary Fund estimates the Canadian economy will contract by 6.2 percent this year.










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Coronavirus Outbreak: Is Trudeau planning specific laws to help the energy sector?

Statistics Canada will also release GDP figures for March and the first quarter of this year.

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The national statistics office said “nowcast” figures would provide the first estimate of COVID-19’s economic impact.

© 2020 The Canadian Press

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The Canadian dollar’s rally stalled ahead of the potential for further easing of the Board of Commissioners | Instant News


The Canadian dollar was little changed against US partners on Tuesday, with the currency stable after the recent rally as investors considered the prospect of further easing measures this week by the Bank of Canada.

Financial markets expect the Bank of Canada to leave its benchmark interest rate on hold at 0.25 percent at a policy announcement scheduled for Wednesday, but the central bank can announce other measures, such as adjusting asset purchases, or quantitative easing (QE)), programs.

Since early March, the central bank has cut interest rates by 150 basis points, in a series of emergency measures, and has begun buying at least $ 5 billion of government bonds per week.

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“If the Board of Commissioners will loosen again on margin, we expect to be in their QE program,” said Simon Harvey, an FX market analyst for Monex Europe and Monex Canada. “The current $ 5 billion (C $) weekly purchase is a decrease in the ocean compared to the US Fed.”

The US Federal Reserve has more than $ 5.9 trillion of assets in its books.

At 2:59 pm the Canadian dollar traded almost unchanged at 1.3903 with the greenback, or 71.93 US cents. The currency, which on Monday touched the strongest intraday level since March 16 at 1.3852, traded in a range of 1.3863 to 1.3924.

World stocks rose after Chinese trade data came in better than expected and because some countries tried to restart their economy by lifting some restrictions aimed at curbing the corona virus pandemic.

Canada is a major exporter of commodities, including oil, so that its economy can be disadvantaged mainly by the contraction of the global economy.

The International Monetary Fund projects that global output will drop 3 percent by 2020, with the Canadian economy expected to shrink by 6.2 percent.

US crude futures settled 10.3 percent lower at $ 20.11 a barrel, with investors doubting that a reduction in supply could immediately balance the market as demand plummeted due to the coronavirus pandemic.

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Yields on Canadian government bonds vary across the curve. The 10-year rose half of the base point at 0.764 percent.

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