Bank of Canada to end credit market aid programs amid improving economy
Posted Mar 23, 2021 11:15 am.
Last Updated Mar 23, 2021 12:01 pm.
OTTAWA — The Bank of Canada says it will wind down several pandemic buying and lending programs aimed at keeping credit flowing, believing its work there is done as market conditions improve.
In a speech today, deputy governor Toni Gravelle says the bank will suspend or discontinue market liquidity-focused programs beginning early April and then into May.
He says the bank can take these steps now because corporate and provincial borrowers have “unfettered access to fully functional debt markets.”
Gravelle adds that credit spreads for most of these borrowers are at or below pre-pandemic levels, making it clear the bank’s involvement is no longer required.
The details of each transaction will be made public at the end of June.
The central bank had said it would adjust its pandemic programs as conditions required, and the announcement Tuesday adds another sign that the economy is performing better than anticipated.
This report by The Canadian Press was first published March 23, 2021.
The Canadian Press
