BoC Scales Back Bond-Buying Program

The Bank of Canada (BoC) has decided on Tuesday to reduce the frequency of its Provincial Bond Purchase Program (PBPP) from two auctions per week to one.

The move is consistent with the gradual reduction approach of programs that were introduced to help the Canadian economy cope with the impact of the Coronavirus crisis, said BoC spokesman Alex Paterson as cited by Reuters.

However, the Canadian central bank is committed to the quantitative easing program until economic recovery is achieved.

Earlier today, BoC Governor Tiff Macklem said that the Canadian economy will achieve a strong recovery this year.

“Clearly getting vaccines into Canada and into Canadians is top priority.”

“The sooner we achieve widespread immunity and can get back to more normal activities, the stronger and more sustained will be the recovery.”

“When we see extrapolative expectations, when we see people starting to buy houses solely because they think the prices are going to go up, that is a warning sign for us. We are starting to see some early signs of excess exuberance.”

“We are not returning to the same economy we had before the pandemic. Even as it recovers, the economy is adapting to structural changes, and some workers will need to shift to jobs in faster-growing sectors.”