Poloz outlines coronavirus risks in speech
Bank of Canada Governor Stephen Poloz will speak to reporters Wednesday in a joint press conference with Finance Minister Bill Morneau, but the central bank has no plans to announce new measures.
In an email Wednesday morning, the Bank of Canada said Poloz will only be speaking about the work it has been doing to ensure the financial system is running smoothly.
The joint news conference between Poloz and Morneau will be held at 11:15 am, according to an advisory from the finance ministry. Morneau is expected to release a stimulus package of about 1 per cent of GDP in a bid to help stave off a recession as Canada grapples with fallout from the coronavirus pandemic and a sharp drop in oil prices.
Poloz and Morneau
Speculation had been rising that the Bank of Canada would announce another surprise cut to interest rates at the same time as the government’s aid package. On Friday, Morneau and Poloz made a rare joint appearance in which the central bank announced an emergency half-percentage-point cut to its benchmark rate.
Investors are predicting another inter-meeting cut as oil prices move even lower and financial market turmoil persists.
“The Bank has probably not lost its sense of urgency and we could see more action today,” Jimmy Jean, a fixed-income strategist at Desjardins Capital Markets, said in a note to clients. He added the central bank could “very well go to zero today, in a move that would accompany the fiscal package and send a strong signal that monetary-fiscal coordination is no longer just theory.”
Another 50 basis point cut by the Bank of Canada would bring its policy rate to 0.25 per cent, matching its lowest level on record. On Sunday, the U.S. Federal Reserve unexpectedly cut rates to near zero and the Bank of England also has its rate set at 0.25 per cent.
--With assistance from Erik Hertzberg.