The Bank of Canada kept its key interest rate target on hold as it said it believes the economy has avoided its worst-case scenario due to the pandemic.

The central bank said Wednesday its target for the overnight rate will remain at 0.25 per cent.

It said the impact of the pandemic on the global economy appears to have peaked, although uncertainty about how the recovery will unfold remains high.

The bank said it believes Canada has avoided the most severe economic scenario painted that it painted in April, updating its GDP figures for the second quarter of the year.

The central bank now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019, down from the 15 to 30 per cent decline forecasted in April.

In a statement announcing the rate decision, the central bank said it still expects the economy to resume growth in the third quarter.

91裸聊视频淒ecisive and targeted fiscal actions, combined with lower interest rates, are buffering the impact of the shutdown on disposable income and helping to lay the foundation for economic recovery,91裸聊视频� the statement said.

The announcement comes on the first day of Tiff Macklem91裸聊视频檚 tenure as governor, taking over from Stephen Poloz whose seven-year term ended Tuesday.

Macklem participated as an observer during deliberations by the bank91裸聊视频檚 governing council over the past few days, the statement says, adding that the new governor 91裸聊视频渆ndorses the rate decision and measures announced.91裸聊视频�

The bank also announced it was reducing the frequency of its term repo operations and purchases of bankers91裸聊视频� acceptances citing improvements in short-term funding conditions.

Other programs to purchase federal, provincial, and corporate debt will continue unchanged, the bank says, but adds it could change tactics in response to economic conditions.

91裸聊视频淎s market function improves and containment restrictions ease, the Bank91裸聊视频檚 focus will shift to supporting the resumption of growth in output and employment,91裸聊视频� the statement says. 91裸聊视频淭he Bank maintains its commitment to continue large-scale asset purchases until the economic recovery is well underway.91裸聊视频�

Economic reports continue this week with Statistics Canada91裸聊视频檚 look at the May jobs market scheduled for release Friday.

The Canadian Press

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