Bank of Canada Holds Rates, Still Sees Economic Recovery In Second Half

• The Bank of Canada left rates unchanged on Wednesday and said it expects growth to strengthen in the second half following a shock contraction last quarter. The central bank left its key interest rate at a record low of 0.25% and maintained its current quantitative easing program.
• Canada's economy unexpectedly shrank in the second quarter, data showed last week, and a preliminary estimate for July showed another contraction, putting pressure on its economic recovery.
• "The Bank continues to expect the economy to strengthen in the second half of 2021, although the fourth wave of COVID-19 infections and ongoing supply bottlenecks could weigh on the recovery," the Bank of Canada said in a statement.
• The central bank kept its guidance that economic slack would be absorbed sometime in the second half of 2022, even with the surprise economic contraction in the second quarter and a softer start to the third quarter.

(Source: Reuters)