Its purpose is to help the Bank achieve its 2% inflation target when inflation is below target or negative and our policy rate is already as low as it can go. How does this work? Well, when our policy interest rate is at the effective lower bound of 25 basis points, QE helps lower interest rates out along the yield curve.
At the current juncture, nobody can foresee how the energy markets will develop. An abrupt interest rate hike in the markets would put many borrowers and financial institutions under pressure. Cyberattacks could exacerbate the situation still further. ♦♦♦ The financial system’s resilience is crucial in determining whether increased risks are amplified by the financial system.