COVID-19: Economic Relief Measures Announced to Date

  • LVTS participants who do not use their NMLP will be able to hold up to 100% of their pledged collateral for the SLF in securities that are currently subject to concentration limits. For more information, see the Bank of Canada’s Market Notice of March 18, 2020, or the COVID-19: Actions to Support the Economy and Financial System.[73][74]

  • The Bank of Canada has also lowered its target for the overnight rate by 50 basis points to 0,25% (from 0,75%), effective March 27, 2020. For more information, see the Bank of Canada’s Market Notice of March 18, 2020, or the COVID-19: Actions to Support the Economy and Financial System.[75][76]

  • On March 16, 2020, the Bank of Canada announced that it is broadening eligible collateral for its term repo facility to include the full range of collateral eligible under the Standing Liquidity Facility, as well as own-name covered bonds. This change was effective immediately. For more information, see the Bank of Canada’s Market Notices of March 16 and March 18, 2020. [77][78]

  • On March 18, 2020, the Bank of Canada announced: a switch buyback operation on Thursday, March 19th in the 10-year sector, a switch buyback operation on Monday, March 23rd in the 5-year sector, a switch buyback operation on Wednesday, March 25th in the 30-year sector. For more information, see the Bank of Canada’s Market Notice of March 18, 2020.[79]

  • Beginning on March 23, 2020, the Bank of Canada will conduct secondary market purchases of one-month Bankers’ Acceptances issued and guaranteed by any Canadian bank of sufficiently high quality. For more information, see the Bank of Canada’s Market Notice of March 18, 2020, or the BAPF Operational Details. [80][81]

  • On March 27, 2020, the Bank of Canada cut its key interest target by half a percentage point to 0.25% in an unscheduled rate announcement. For more information, see the Bank of Canada’s key interest rate[82]

  • Mortgage lending: The following measures have been announced:

    • Under the Insured Mortgage Purchase Program (IMPP), the government will purchase up to $150 billion of insured mortgage pools through Canada Mortgage and Housing Corporation (CMHC), an increase of $100 billion from the $50 billion announced on March 16, 2020. This will provide stable funding to banks and mortgage lenders, so they can continue to lend to Canadian consumers and businesses. In addition, the CMHC is also expanding the issuance of Canada Mortgage Bonds to a total annual issuance amount of up to $60 billion. For more information, see CMHC’s press release of March 26, 2020. Details for the Purchase Operations are available here. [83][84]

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