#YouAskedUs if we printed cash to finance the federal gov’t.
We didn't.
👇 Keep reading to learn how we supported the economy from the shock of the pandemic. #CdnEcon #AskTheBoC
1/6
We didn't.
👇 Keep reading to learn how we supported the economy from the shock of the pandemic. #CdnEcon #AskTheBoC
1/6
The pandemic has been a crisis like no other.
As a result, we took various measures, like buying bonds, to support and ensure a strong and stable #economy.
2/6
As a result, we took various measures, like buying bonds, to support and ensure a strong and stable #economy.
2/6
We bought existing gov't bonds from banks on the open market.
Why?
This helped unblock frozen markets at the start of the #pandemic.
It let households, companies and governments access funding when they really needed it.
3/6
Why?
This helped unblock frozen markets at the start of the #pandemic.
It let households, companies and governments access funding when they really needed it.
3/6
Buying bonds also pulled down⬇ interest rates across the #economy.
This lowered the cost of borrowing to help Canadians get through the pandemic.
4/6
This lowered the cost of borrowing to help Canadians get through the pandemic.
4/6
We did 𝐧𝐨𝐭 print cash to pay for the #bonds.
We bought the bonds with settlement balances – a kind of central bank reserve – not with bank notes.
What’s the difference?
5/6
We bought the bonds with settlement balances – a kind of central bank reserve – not with bank notes.
What’s the difference?
5/6
Settlement balances don’t permanently add to the money supply.
Unlike cash, we can remove those reserves from the system. And you can see that we’ve been doing just that.
Read more about how Quantitative Easing works: bankofcanada.ca/2022/06/unders…
#QE
6/6
Unlike cash, we can remove those reserves from the system. And you can see that we’ve been doing just that.
Read more about how Quantitative Easing works: bankofcanada.ca/2022/06/unders…
#QE
6/6
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