The Bank of Canada (BoC) maintained its benchmark interest rates unchanged at 0.25 percent on Wednesday, as widely expected. It also left its quantitative easing (QE) program at $5 billion per week.

In its policy statement, the Canadian central bank noted:

• Both the global and Canadian economies are evolving broadly in line with the scenario in July Monetary Policy Report (MPR);
• Bank continues to expect this strong reopening phase to be followed by protracted and uneven recuperation phase, which will be heavily reliant on policy support; the pace of the recovery remains highly dependent on path of COVID-19 pandemic and evolution of social distancing measures;
• Canada's real GDP fell by 11.5 percent (39 percent annualized) in Q2, resulting in decline of just over 13 percent in H1, largely in line with Bank’s July MPR central scenario;
• Bounce-back in activity in Q3 looks to be faster than anticipated in July;
• The Bank continues to expect recuperation phase to be slow and choppy as the economy copes with ongoing uncertainty and structural challenges;
• CPI inflation is close to zero, with downward pressure from energy prices and travel services, and is expected to remain well below target in the near term
• As the economy moves from reopening to recuperation, it will continue to require extraordinary monetary policy support;
• Governing Council will hold the policy interest rate at effective lower bound until economic slack is absorbed so that 2-percent inflation target is sustainably achieved;
• QE program will continue until the recovery is well underway and will be calibrated to provide the monetary policy stimulus needed to support the recovery and achieve the inflation objective.