The Bank of Canada is likely to wrap up its quantitative tightening program as early as April, sooner than policymakers had previously indicated, according to RBC Capital Markets strategists.

The central bank under Governor Tiff Macklem has been shrinking its balance sheet for about two years, withdrawing the extraordinary stimulus it provided during the worse phase of the Covid-19 shock. Its assets have tumbled to around C$313 billion ($231 billion) from a peak of more than C$570 billion as it allows government bonds it holds to mature, draining liquidity from the financial system.

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