The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent, saying this morning that it is effectively as low as it can go to combat the economic impacts of COVID-19.

The central bank says the downturn tied to COVID-19 will be the worst on record. Preliminary data from Statistics Canada today showed economic activity collapsed in March as it dropped a record nine per cent.

The pandemic has forced companies to close and workers to stay at home as much as possible in a massive public health effort to slow the spread of COVID-19, leading to steep and sudden drops in business activity and consumer spending.

The central bankB次元官网网址檚 economic outlook also released this morning says the speed of the anticipated rebound rests on the shoulders of containment efforts to bring the pandemic under control.

If conditions improve quickly, the economic shock is likely to be B次元官网网址渁brupt and deep but relatively short-livedB次元官网网址� and followed by a strong rebound for most, but not all, sectors of the economy.

A more severe scenario would likely see a B次元官网网址渟ignificant numberB次元官网网址� of businesses closing for good and longer spells of unemployment as workers look for new jobs.

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The Canadian Press

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