16 April 2014

Today, as expected, the BoC held its key lending rate at 1%.

The Bank also repeated that the risk of downside inflation is still important. In addition to it, the risks of record high household debt level remains significant. In the same time, these risks are balanced, so the central bank doesn’t have a reason for changing its monetary policy.

Meanwhile, in his teleconference from Toronto (where he went for a funeral of a former finance minister Jim Flaherty) Poloz noted there are also risks concerning Canadian exports which may not recover fully or the conflict between Ukraine and Russia which may cause a political shock.

“We’re staying neutral, and it means we can’t rule out the possibility of a rate cut in the future,” – Poloz added. “It all depends on the data.”