Relative to the balance sheets of most other central banks that have undertaken QE programs, ours has a shorter average term to maturity. Roughly 40% of our bond holdings mature within the next two years. This suggests that, other things being equal, our balance sheet would shrink relatively quickly.
As our Government of Canada holdings mature and roll off, the level of settlement balances on our balance sheet, which currently stands at about $ billion, will decline roughly in tandem.2 QT would complement increases in the policy rate, putting upward pressure on interest rates at maturities where households and businesses typically borrow.