Bank of Canada's Carney won't cram in moves before exit
By Solarina Ho and John Tilak
TORONTO (Reuters) - Bank of Canada Governor Mark Carney, who has signaled for months that the central bank's next interest rate move will be an increase, said on Tuesday he won't rush through any policy decisions before he leaves in June to head the Bank of England.
After his first speech since his surprise appointment as BoE governor, Carney was asked if he would leave the nagging problem of soaring household debt for his successor to deal with.
"What would be entirely wrong is to manage policy to my horizons as opposed to the right horizons to have, the optimal policy horizons. We're not going to try to cram a bunch of decisions into the next six months," he said.
Carney repeated the bank's hawkish line that it will likely need to raise rates, making it an outlier among developed countries' central banks, which are more concerned about stimulating growth.
Markets don't expect a rate move before late 2013. <CA/POLL>
But Carney has also hinted at a less conventional use of monetary policy that could alter that timetable: hiking rates to specifically target excess household debt and the heated housing market.
He has promised to be transparent about the bank's goals if it were ever to resort to such a move.
Targeting rates for that kind of use would be unusual for the inflation-targeting central bank but it fits within its mandate, which allows monetary policy to be used for financial stability purposes in some circumstances. Continued...