UPDATE 1-Bank of Canada keeps 'over time' condition on rate hike

Wed Nov 21, 2012 12:21pm EST
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* "Over time" phrase signals rate hike not imminent

* Sees modest, unbalanced global growth

* Still expects moderate Canadian growth

* Bank of Canada alone in G7 in signaling higher rates

OTTAWA, Nov 21 (Reuters) - Bank of Canada Deputy Governor Tim Lane repeated on Wednesday the central bank's message that interest rate increases will likely be needed, but only over time.

The "over time" phrase was introduced in the bank's key guidance in its rate statement on Oct. 23 as a way of signaling that while the next rate move is likely to be up, such a move was less imminent than it had been.

"Over time, some gradual withdrawal of monetary policy stimulus will likely be required, consistent with achieving the inflation-control target," Lane said, according to a prepared presentation he was giving on Wednesday in Moncton, New Brunswick.

Another part of the presentation, which was posted on the central bank's website, noted: "The Canadian economy continues to operate with a small amount of excess supply."