By Canadian Press

Bank of Canada’s independence key to aiding post-COVID recovery, Wilkins says

May 4, 2020 | 10:20 AM

OTTAWA — The second-in-command at the Bank of Canada says maintaining the independence of the central bank will be key to aiding the economy during and after the COVID-19 pandemic.

Carolyn Wilkins says in a speech today that the bank’s monetary policy is about ensuring businesses and individuals can access lines of credit and short-term loans, and help spur demand during an expected recovery through low interest rates.

The bank’s balance sheet has more than tripled from around $120 billion in early March before the shutdown, to around $385 billion as of last week.

Wilkins says the financial risk to taxpayers is low because of restrictions around the federal, provincial and private bond purchase programs.

But she also says all of the actions by Ottawa and the central bank will leave the country with more public and private debt than before the pandemic forced a freeze on economic activity.

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She says managing the economic situation post-pandemic will require the bank to make decisions with an eye towards controlling prices so they don’t rise or fall rapidly.

This report by The Canadian Press was first published May 4, 2020.

The Canadian Press