Low interest rates have done their job: Poloz

Bank of Canada assessing if the low-interest rate stimulus is still required.

June 14, 2017   by CP STAFF

OTTAWA — The Bank of Canada is sending out more signals that it’s moving closer to a hike in its benchmark interest rate as the economy continues to strengthen.

Governor Stephen Poloz told the CBC in an interview broadcast June 13 that rate cuts introduced by the bank amid the oil-price slump have done their job.

The bank reduced its trend-setting rate twice in 2015 to the very low level of 0.5% to help the economy as it struggled with the effects of the oil price shock.

Poloz’s remarks come a day after the bank’s second-highest ranking official indicated the governing council is assessing whether the considerable stimulus from the low rates is still required.

Senior deputy governor Carolyn Wilkins said in recent months the economy has registered impressive, broad-based gains not seen since before the oil price collapse nearly three years ago.

Analysts say these types of comments suggest the bank is beginning to assess when, not if, the bank might introduce its first rate increase in nearly seven years.

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1 Comment » for Low interest rates have done their job: Poloz
  1. Allen says:

    Increased interest rates- what for? Aren’t all Canadian Banks making record profits? Are they so greedy they risk collapsing the economy for the sake of even more profit? With most Canadians are at record levels of debt, we still have a soft job market, and with major government spending on infrastructure, raising interest rates now could be the kiss of death for the Canadian economy.

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