OTTAWA (Reuters) - The Bank of Canada on Wednesday repeated its message that the strong Canadian dollar would probably offset positive economic developments since July and that it could expand the money supply if needed.
Deputy Governor John Murray said in the prepared text of a speech he was giving in British Columbia that growth had resumed in Canada after three quarters of sharp contraction.
"But the increased volatility and persistent strength of the Canadian dollar are projected to more than offset the positive developments observed since July. This will slow growth and dampen inflation pressures, delaying the return of inflation to the 2 per cent target," he said.
The message was the same as that of the October 22 Monetary Policy Report, including a statement that the central bank had "considerable flexibility with regard to the conduct of monetary policy" despite not being able to cut interest rates any further.
Murray noted the bank had unconventional tools at its disposal, including quantitative easing, or expansion of the money supply, if it needed to boost growth or inflation.
He also repeated the bank's conditional pledge to keep the overnight interest rate unchanged at 0.25 percent till the middle of next year.
(Reporting by Randall Palmer; editing by Rob Wilson)
© Reuters Limited. All Rights Reserved.
Reproduction or redistribution of Reuters content, including framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.
