ISTANBUL (Reuters) - Bank of Canada Governor Stephen Poloz insisted on Tuesday that he has not been talking down the Canadian dollar, saying it has fallen because of economic developments, particularly the collapse in the price of oil.
Speaking in an interview with Reuters and another news outlet, Poloz said the oil price shock has been front and center at meetings of the Group of 20 leading economies, but nothing he has heard at the talks so far has changed his economic outlook.
“I honestly reject the notion that I’m talking down the dollar,” Poloz said during a break in the meeting.
“If over the last 18 months the economy has underperformed the expectations, ... it’s only by being open about that and people seeing it happening, and oil prices declining on top of that, that the dollar has moved,” he added.
“It’s not about what we did. It’s about how the economy has behaved.”
Poloz, who moved over from Export Development Canada in mid-2013, has often spoken of the need for exports to take over as a main economic driver in Canada, and some analysts have suggested he was therefore happy to see a weak currency.
“I reject the notion that we’re being purposeful about that,” he said.
At the G20 talks, he said nobody was sure how big the oil shock was and how long prices would stay where they are.
But he said that for Canada, a major oil exporter, the lower prices meant a 3 percent decline in income. “That’s more than a year’s worth of growth erased,” he said. “That’s not just a theoretical disturbance. It’s a real deal.”
There are of course positive effects, for example more money for consumers to spend, but he said the negative effects were immediate, whereas the positive effects emerged more gradually and over a longer time.
On another issue at the G20, the Greek debt crisis, Poloz voiced concern though it was primarily a subject for Europeans.
“Certainly the kinds of volatility you could have from that scenario is of interest or even concern for everybody,” he said.
Editing by Nick Tattersall