‘Monetary policy must also anticipate the road ahead.’ – Carolyn Wilkins, Bank of Canada
The Bank of Canada Senior Deputy Governor Carolyn Wilkins said on Monday that the Bank would discuss whether monetary policy stimulus was still required. The Governor noted that the economy showed impressive growth, whereas the share of sectors posting employment gains was increasing. She also said that Canada, being one of the biggest exporters of oil, managed to adapt to low oil prices. The 2014 oil price drop forced the Central bank to cut rates twice in 2015 to 0.50% in order to support economic growth. The BoC’s next meeting is scheduled for July 12. The majority of analysts suggest that the Bank will remain on hold until 2018; however, some market participants predict a rate hike already this year. Wilkins said that inflation growth remained of central importance to policymakers. Thus, the Governor stated that the Bank’s policymakers would take necessary measures in order to meet the 2% inflation target. She also pointed to excess capacity, subdued wage growth and the high degree of uncertainty coming from the United States, Canada’s main trading partner.
