Photo: The Canadian Press

The Bank of Canada is keeping its key interest rate target on hold.

The central bank says its target for the overnight rate will remain at 0.25 per cent.

It says the impact of the pandemic on the global economy appears to have peaked, although uncertainty about how the recovery will unfold remains high.

The bank it believes Canada has avoided the worst-case economic scenario painted that it painted in April, updating its GDP figures for the second quarter of the year.

The central bank now expects GDP to decline between 10 and 20 per cent compared with the fourth quarter of 2019, down from the 15 to 30 per cent decline forecasted in April.

In a statement announcing the rate decision, the central bank says it still expects the economy to resume growth in the third quarter.