Bank of Canada Deputy Governor Tim Lane, answering questions from the audience following a speech in Saskatoon, Saskatchewan, said the the central bank is closely monitoring the impact of a stronger Canadian dollar.
‘As the Canadian dollar is strengthening, we are certainly watching that closely and will be taking that into account pretty strongly in making our decision’
Lane said that each rate announcement is ‘live’ and the central bank stressed in July that its decisions are data-determined
Interest rates are still “quite low” compared to their “neutral” levels, but that “still seems appropriate” given the central bank doesn’t know how the economy is going to react to interest rate increases. For example, households are way more indebted than they were the last time interest rates were near neutral
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