The Bank of Canada is maintaining its key interest rate target at 0.25 per cent.
It comes nearly three weeks after the central bank lowered the rate to its lowest level.
The Bank of Canada also released its economic outlook Wednesday, which suggests the near-term downturn caused by the pandemic will be the “sharpest on record”.
It said the long-term economic decline will depend on how long the containment measures last.
In the “less severe and less severe scenario,” the decline is expected to be “abrupt and deep but relatively short-lived.”
“The recession would be rapidly followed by a strong rebound in activity, particularly if the price of oil also bounced back quickly, in line with foreign demand,” said the outlook.
Under a second scenario, the impact on households and businesses could be “more severe and much more persistent.”
“For example, if control measures are required for a longer period, the impact of the pandemic would be greater. This could, in turn, lead a significant number of businesses to permanently close their doors during the downturn, resulting in some permanent costs through the bankruptcy process,” said the outlook.
