Canada rate message in tune with G20 debate: Poloz

Sat Jul 20, 2013 12:16pm EDT
 
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By Randall Palmer

MOSCOW (Reuters) - All the talk of economic weakness during the G20 talks in Moscow does not make the Bank of Canada more inclined to keep rates low for longer than it had otherwise planned, Governor Stephen Poloz said on Saturday.

Poloz also came to the defense of the U.S. Federal Reserve, stating that Chairman Ben Bernanke's description of plans eventually to taper its bond buying was carefully communicated, as asked for in Saturday's communiqué of finance ministers and central bankers of the Group of 20 leading economies.

The G20 meeting emphasized near-term growth and job over fiscal consolidation, because of disappointing weakness especially in Europe. Finance Minister Jim Flaherty did not take part in the talks, despite travelling to Moscow, due to illness.

"Whatever we saw was consistent with what we put out just a few days ago," Poloz said, referring to the Bank of Canada's Monetary Policy Report on Wednesday.

"I came away reassured that you've got the story right ... You get to talk to your counterpart from another country and say, ‘Here's what we're looking at,' and they say ‘Yes, that's about right,' and that's good validation."

U.S. GROWTH

The Bank of Canada had already slightly downgraded its foreign outlook, Poloz said, "but you should remember that from a Canadian perspective the mix of global growth is actually turning more positive and that's because it's the U.S. which is disproportionately the grower.

"One dollar more growth there is a lot more valuable to a Canadian company than a dollar growth somewhere else, because it's very much more likely it's a trading partner."   Continued...

 
Bank of Canada Governor Stephen Poloz takes part in a news conference upon the release of the Monetary Policy Report in Ottawa July 17, 2013. REUTERS/Chris Wattie