July 11, 2018 / 3:57 PM / 3 months ago

HIGHLIGHTS-Bank of Canada's Poloz and Wilkins speak after rate hike

TORONTO, July 11 (Reuters) - Below are some key quotes from Bank of Canada Governor Stephen Poloz and Senior Deputy Governor Carolyn Wilkins in Ottawa, after the central bank raised interest rates.

WILKINS ON EXPORTS:

“When it comes to exports we’ve been surprised so far this year, and so that higher level of exports is something that we’ve already seen and certainly our forecast with respect to growth going forward is very prudent.”

“You have to think that for exports, there is a floor to it, I mean the economy in the U.S. is doing very well, stronger than we thought, and oil prices are higher than they were in April, and so there is a floor to this and we are confident in our outlook given the assumptions that we’ve made so far.”

POLOZ ON INFLUENCE OF POTENTIAL U.S. RATE HIKE: Asked how much of the rate decision was based on economic forecasts and how much on anticipation of a rate hike in the United States: “All if it on part A and none of it on part B, so that’s the simplest answer to your question.”

POLOZ ON THE ROLE OF TRADE ACTIONS IN RATE DECISION:

“The escalation of trade actions was quite a part of our discussions but we agreed very early on that it was not going to be the basis for our decision. But it’s something we need to keep ourselves well informed on, and it’s why I carefully laid out the channels in my opening remarks, because a lot of people don’t understand just how complicated that type of shock is for the economy.”

BOC’S POLOZ ON MARKET EXPECTATIONS:

“I am not really seeing any misunderstandings ... I think that the market has been watching the data very closely as we have and today’s adjustment was certainly highly anticipated. I think that’s just an example of how data dependence should look.”

BOC’S POLOZ ON WHETHER ECONOMY NEEDS STIMULUS TO FEND OFF HEADWINDS:

“I don’t think we know the answer to that yet, it’s a question of, as we have said before, our confidence in the outlook grows a step at a time and it is why we have emphasized so much that we are data dependent.”

BOC’S POLOZ ON HIGHER INTEREST RATES BEING WARRANTED:

“We still believe (the neutral rate) is in that two-and-a-half to three-and-a-half percent zone with inflation at two percent, so that’s why we say that given everything else, how well the economy is doing, it is evident to us that higher interest rates will be warranted. But of course we are not in a position to say exactly how much higher or at what rate we might get there.” (Reporting by Fergal Smith, Allison Martell, Danya Hajjaji; Editing by Amran Abocar)

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