- Stephen Poloz, Bank of Canada Governor
Bank of Canada Stephen Poloz said the economy does not need unconventional policies such as QE to boost growth, with a weaker local Dollar and recent rate cuts supporting the recovery. So far this year the central bank has lowered its benchmark interest rate two times, bringing it to 0.5%. However, Poloz admitted that Canada's economy could follow other countries, which have recently gone to negative interest rates. The Governor said "the effective lower bound for Canada's policy rate is around minus 0.5%, but it could be a little higher or lower". Poloz's comments suggested that the BoC still had more room to manoeuvre in response to negative shocks.
Even though Poloz indicated that negative interest rates as a possible tool for the central bank, he also highlighted that it is not a guarantee the BoC will introduce these policies. The central bank predicts the nation's economy to return to full capacity around mid-2017, with the risks to the outlook being roughly balanced. The overall economy is growing, even as the resource sector contends with lower prices. The non-resource sectors of the economy are gathering steam, providing much-needed support to Canada's economy.
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