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Essentials of Monetary Policy

Bank of Canada (BoC). Monetary Authorities Stay the Course despite the Improved Economic Outlook

March 10, 2021
François Dupuis • Mathieu D’Anjou • Benoit P. Durocher • Hendrix Vachon

This was expected, even if the economic outlook has improved significantly recently; the BoC didn’t announce any change in the way it’s managing its monetary policy. That said, with no Monetary Policy Report (MPR) available, the time wasn’t right for the BoC to make any major changes. With the next MPR update scheduled for April 21, it’s possible that some of the uncertainty will have cleared by then. For example, we’ll know more about how the vaccination rollout is going and how Canada’s economic recovery is progressing. If all goes as expected, the BoC could revise its forecasts upward in its next MPR. In addition, the absorption of excess production capacity could be ahead of schedule