Ottawa: The Bank of Canada lost $522 million in the third quarter of this year, marking the biggest loss the bank has suffered in its 87-year history.

The Central Bank’s quarterly financial report revealed that the revenue from the interest on its assets could not be reconciled with interest charges on deposits at the bank, due to which this loss was caused.

The Bank of Canada’s sharply better interest rates this year also increased the cost of interest on settlement balances deposited in the accounts of other big banks. During this time, the income that the central bank gets from government bonds remains fixed.

Under the government’s Bond Purchasing Program, the Bank of Canada managed to expand its assets dramatically. This policy was part of the central bank’s efforts to bring the economy back on track. Due to the expansion of this asset, the burden on the central bank has now increased and the bank had to pay for the government bonds with the creation of settlement balances, officials said.

Leave a Reply