29 Apr 2014
BoC Poloz retains dovish stance
FXStreet (Bali) - BOC’s Poloz has been crossing the wires in the last hour, with plenty of headlines to chew on, the most relevant perhaps being his view that inflation in Canada remains low.
Reuters provided the headlines, noting that "Poloz reiterates that BOC will look past higher total CPI toward underlying trend", adding that "the Bank continues to see a gradual strengthening in the fundamental drivers of growth and inflation in Canada, although this view depends largely on the projected upturn in exports and investment."
Poloz also said the BoC "is willing to accept risks of low-for-long interest rates", also noting Canada "is not yet out of the downturn."
Reuters had further headlines on Poloz, who said "if there were an economic downturn, we would be vulnerable to a correction in housing prices, household debt service could become a problem if there is a significant shock to Canada’s economy." Poloz said, however, that household debt ratio "is sustainable and will gradually ease."
On more policy-related comments, Poloz said "Bank of Canada’s monetary policy will be conducted completely independently of the US", adding that "the reduction of Federal Reserve quantitative easing is now better understood by markets."
Asked about possible interest rate cut, Poloz said "if export recovery does not materialize as expected, and therefore inflation would be lower, this could cause reevaluation of stance, with the possibility of a lower interest rate."
Poloz even had a brief comments with regards to the Ukraine/Russia situation, saying "it poses as a down-side risk, although still early to determine impact on economy."
Reuters provided the headlines, noting that "Poloz reiterates that BOC will look past higher total CPI toward underlying trend", adding that "the Bank continues to see a gradual strengthening in the fundamental drivers of growth and inflation in Canada, although this view depends largely on the projected upturn in exports and investment."
Poloz also said the BoC "is willing to accept risks of low-for-long interest rates", also noting Canada "is not yet out of the downturn."
Reuters had further headlines on Poloz, who said "if there were an economic downturn, we would be vulnerable to a correction in housing prices, household debt service could become a problem if there is a significant shock to Canada’s economy." Poloz said, however, that household debt ratio "is sustainable and will gradually ease."
On more policy-related comments, Poloz said "Bank of Canada’s monetary policy will be conducted completely independently of the US", adding that "the reduction of Federal Reserve quantitative easing is now better understood by markets."
Asked about possible interest rate cut, Poloz said "if export recovery does not materialize as expected, and therefore inflation would be lower, this could cause reevaluation of stance, with the possibility of a lower interest rate."
Poloz even had a brief comments with regards to the Ukraine/Russia situation, saying "it poses as a down-side risk, although still early to determine impact on economy."