Paul Beaudry says the bank's recent bond-buying program is not the equivalent of printing money or underwriting government debt at no cost, but rather a way to keep borrowing costs in check and support households and businesses in the wake of the COVID-19 pandemic.
The central bank has purchased a little more than $180 billion in Government of Canada bonds since March, and on Wednesday said it would continue to buy $4 billion in bonds per week, down from $5 billion a week at the start of the COVID-19 pandemic. Beaudry says the Bank of Canada's decision to buy the bonds is a way to keep long-term borrowing costs low, on top of its decision to dampen short-term borrowing costs by keeping its key interest rate at 0.25 per cent.
Going forward, Beaudry says the Bank of Canada is prepared for the economy to either take a more persistent turn for the worst, or for an upside scenario where a COVID-19 vaccine rolls out quickly. Beaudry says Canadians should rest assured that the bank's policy-makers will not overuse the bond-buying policy and will keep inflation from pushing prices higher.