BoC’s Poloz again says low rates have ‘done their job’

Stephen Poloz, governor of the Bank of Canada, has once again stated that it looks like low interest rates that were put in place in 2015 have “done their job.” He stopped short of predicting the central bank’s next move.

Poloz made these comments in Portugal, where he’s participating in a forum hosted by the European Central Bank. He said in an interview broadcast on business news channel CNBC that the Canadian economy has been recovering from the global financial crisis that erupted in 2008 and the sudden decline in oil prices that began in late 2014.

These comments follow Poloz’s hawkish and similar statements made to CBC on June 13. He also stressed during that interview that the 2015 rate cuts have been effective.

The BoC’s next interest rate announcement is set for July 12 when it will also release an updated outlook for the economy in its monetary policy report. On the back of the central bank’s latest comments, many now expect the Bank to move in the fall.

Read: Despite dovish data, BoC could move in 2017

In Portugal, Poloz also said that virtually every major area of the world seems to be gaining economic momentum, with the United States “way out in front.” He says the drop in oil prices set Canada’s economy back, causing the Bank of Canada to compensate by lowering interest rates, but growth has returned to a more normal pace.

Also read:

Are central banks too optimistic about growth?

Is Canada’s economy set to surge? Here are banks’ forecasts

Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.