mercredi 15 avril 2015
Poloz: Opening Statement
Posted on 08:23 by nice news
Good morning. Carolyn and I are happy to be here to answer your questions about today’s interest rate announcement and our latest Monetary Policy Report (MPR). Let me begin with a few remarks around the issues that were most important to the Governing Council’s deliberations.
I’ll start with the global context. The plunge in oil prices was due mostly to strong supply growth, but a softening in demand growth also contributed. A wide range of other commodity prices have declined further this year, also suggesting a softer world economy. In this context, we have seen many central banks ease policy this year, ourselves included.
This widespread easing, coupled with the positive implications of lower energy prices for world growth, leads us to the conclusion that the global economy will pick up through the year. Increased economic divergence is prompting divergent monetary policies as well, and is delivering more exchange-rate volatility and, on net, more strength in the U.S. dollar.
Turning to Canada, as we stated in the January MPR, although lower oil prices would have both upside and downside effects on Canada, the net impact would be negative. The negative effects would be immediate and seemed quite certain, whereas the positive effects would be more gradual and less certain. Therefore, we faced a risk that our return to full capacity and stable 2 per cent inflation would be delayed significantly. Accordingly, in January we took out some insurance against that risk, in the form of a 25-basis-point reduction in the policy interest rate.
Our cut led to lower rates across our entire yield curve and a lower Canadian dollar. Meanwhile, oil prices stabilized and recovered to levels around our January forecast assumptions. And, as we monitored the data, we saw that some of the effects of lower oil prices were already being felt during the fourth quarter of 2014.
The updated forecast in today’s MPR suggests
I’ll start with the global context. The plunge in oil prices was due mostly to strong supply growth, but a softening in demand growth also contributed. A wide range of other commodity prices have declined further this year, also suggesting a softer world economy. In this context, we have seen many central banks ease policy this year, ourselves included.
This widespread easing, coupled with the positive implications of lower energy prices for world growth, leads us to the conclusion that the global economy will pick up through the year. Increased economic divergence is prompting divergent monetary policies as well, and is delivering more exchange-rate volatility and, on net, more strength in the U.S. dollar.
Turning to Canada, as we stated in the January MPR, although lower oil prices would have both upside and downside effects on Canada, the net impact would be negative. The negative effects would be immediate and seemed quite certain, whereas the positive effects would be more gradual and less certain. Therefore, we faced a risk that our return to full capacity and stable 2 per cent inflation would be delayed significantly. Accordingly, in January we took out some insurance against that risk, in the form of a 25-basis-point reduction in the policy interest rate.
Our cut led to lower rates across our entire yield curve and a lower Canadian dollar. Meanwhile, oil prices stabilized and recovered to levels around our January forecast assumptions. And, as we monitored the data, we saw that some of the effects of lower oil prices were already being felt during the fourth quarter of 2014.
The updated forecast in today’s MPR suggests
Poloz: Opening Statement
Categories: Poloz: Opening Statement
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