OTTAWA (Reuters) – The Financial institution of Canada revised its outlook for first-quarter GDP progress to optimistic on Wednesday, saying the Canadian financial system was extra resilient than anticipated to a second wave of COVID-19 and stored its key charge at a secure day.

The central financial institution additionally reaffirmed that rates of interest would stay at an all-time excessive of 0.25% till the financial downturn is absorbed, which in its January forecast doesn’t happen till 2023, and has maintained the present tempo of its bond buy program.

“In Canada, the financial system is proving extra resilient than anticipated to the second wave of the virus and the related containment measures,” the BoC mentioned in its press launch.

“GDP progress within the first quarter of 2021 is now anticipated to be optimistic, slightly than the anticipated contraction in January.”

Analysts mentioned the assertion was largely as anticipated, with any change in coverage or tone in April, when the Financial institution of Canada releases its up to date forecast.

“They admitted the plain – that the financial system had carried out higher than anticipated on the finish of the yr,” mentioned Doug Porter, chief economist at BMO Capital Markets. “However they bolstered the message that they don’t seem to be going anyplace quickly with a coverage.”

The central financial institution mentioned whereas the financial outlook has improved, the restoration nonetheless requires extraordinary financial coverage assist.

He additionally famous that employment remained effectively under pre-pandemic ranges and highlighted the chance that additional outbreaks of extra transmissible variants of COVID-19 might add to the turmoil of the restoration.

“This does not sound like a financial institution that’s going to withdraw its stimulus measures as shortly and as out of the blue because the markets count on, though it could present a timeline for the QE minimize as early as April,” mentioned Simon Harvey, senior analyst on the QE. overseas trade marketplace for Monex Canada. .

“For that, the progress of the vaccines and the incoming information can be important,” he added.

The surprising energy of the Canadian financial system by the top of 2020 and into 2021 has spurred bets that the central financial institution will increase charges sooner than its present forecast.

Final month, Financial institution of Canada Governor Tiff Macklem mentioned the Canadian financial system would expertise a robust and sustained rebound this yr as vaccinations enhance, however warned {that a} full restoration was nonetheless distant.

The Canadian greenback was buying and selling 0.1% decrease at 1.2650 in opposition to the buck, or 79.05 US cents after the speed determination.

($ 1 = 1.2646 Canadian {dollars})