Bank of Canada's Poloz sees room to keep rates low-Bloomberg

TORONTO Mon Aug 25, 2014 12:23pm EDT

TORONTO Aug 25 (Reuters) - The Bank of Canada has room to keep interest rates low even if employment starts to pick up, Governor Stephen Poloz said on the sidelines of a central banker gathering on Friday, according to a Bloomberg report.

Persistent slack in Canada's labor market and the tendency toward part-time job creation has restrained the country's income growth, Poloz said in an interview at the meeting of policymakers in Jackson Hole, Wyoming, noting the trend of employment growth has been around 1 percent for some time.

"We're confident there's quite a bit of room to grow and, particularly since our interest rates are already at 1 percent, we figure we've got time to watch this unfold," Poloz said.

The Bank of Canada has held rates at 1 percent since 2010 and is widely expected to keep them there when it releases its next policy statement on Sept. 3.

Although the most recent jobs report showed Canada created 41,700 jobs in July, that was fueled by part-time jobs while full-time positions actually dropped by 18,100.

Last month's jobs report had to be restated after Statistics Canada withdrew the initial erroneous report that showed just 200 new jobs had been created.

Poloz told Bloomberg he has "no concerns at all" about the quality of the data from Statistics Canada.

Poloz also told the news agency that investors who think he favors a weaker Canadian dollar are mistaken, and it is to be expected that the currency would weaken at a time when the U.S. economy is gathering momentum.

"The fact the Canadian dollar came down from over 100 to around the 90 area is something which in certain sectors of our export economy would be a welcome development," Poloz said.

"They've been severely stressed during this period of weak growth plus a strong exchange rate. Normally exchange rates act as a shock absorber." (Reporting by Leah Schnurr; Editing by Jeffrey Hodgson and Tom Brown)

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Comments (1)
Raif wrote:
How many years of University does it take to announce, Interests to Reamanin Low, again and again. Seems as though the prerequisite for the job is to repeat the one liner,”INTEREST RATES TO REMAIN LOW”. we saw this for ten years with Carney heaven forbid we’ll see this for another 10 years with Poloz. It think we need an infusion of wisdom and new ideas on how to grow the economy and social benifits, a perfect example is the Chinese model. The Chinese for the most part had nothing but family, now they have definite luxuries and even though their standard of living is half of ours they are happy. Canadians have been stagnated for 25 years and our standard of living has decreased, why you may ask, it is because the redistribution of wealth just isn’t happening, but hey, we keep 18 cents of every dollar we earn and pay 82 cents on the costs of; living, taxes, fees, permits, fares, tolls, licenses, premiums,and inflation. For all this we have a governor who hasn’t got any solution but just keeps plugging the old line. The age old fix of controlling inflation by micro managing the dollar is a dead horse that has been flogged for far too long, time to move on with new ideas with new innovative people not the old boys club appointees.

Aug 25, 2014 2:23pm EDT  --  Report as abuse
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