Bank of Canada Senior Deputy Governor Carolyn Rogers said on Thursday they are looking for more evidence that the current interest rate levels are high enough. In a prepared speech to be delivered at the Manitoba Chambers of Commerce approximately at 18:55 GMT, she talks “about the factors behind high inflation and how we know inflation is falling.”
“Yesterday, we decided to leave the policy rate at its current level of 4.50%. We also continued our policy of quantitative tightening.”
“It’s a conditional pause, though. If economic developments unfold as we projected and inflation comes down as quickly as we forecast in the January Monetary Policy Report (MPR), then we shouldn’t need to raise rates further. But if evidence accumulates suggesting inflation may not decline in line with our forecast, we’re prepared to do more.”
“We’ll need to see more evidence to fully assess whether monetary policy is restrictive enough to return inflation to 2%. For now, let me unpack recent developments and share some insight into what we discussed and how we’ll be thinking about things going forward.”
“And with inflation still well above our target, we’re still more worried about upside risks.”
“Major economies around the world are highly interconnected—but while we’re always thinking globally, we have to act locally. We must tailor our policy to Canadian circumstances. And monetary policy needs to be forward-looking.”
“We’re watching closely to see how things unfold. And we are committed to getting inflation all the way back to 2% so Canadians can once again count on low, stable and predictable inflation with sustainable economic growth.”
The USD/CAD erased gains during the American session and is approaching the 1.3800 zone. The Canadian Dollar is among the worst G10 performers on Thursday.
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