BOC's Wilkins:Repeats Bank To Remain Cautious About Change

By Courtney Tower

     OTTAWA (MNI) - Bank of Canada Senior Deputy Governor Carolyn Wilkins said

Wednesday that Canadian monetary policy needs to be prudent in these uncertain

times.

     In the text of a speech to Money Marketeers of New York University, the

number two to Governor Stephen Poloz made no suggestion about future policy rate

changes, but cited the Bank's policy statements three weeks ago that the BOC

would be cautious about changing the 1.0% rate presently.

     She cited several uncertainties facing central bank decision-making in

Canada, from an uncertain global scene to the present NAFTA negotiations.

     The Bank was perfecting its models but real-time judgment and factors that

models do not judge also clouded policymaking, she said.

     Indeed, there was greater uncertainty now in Canada than in the past about

the effectiveness of of monetary policy, its transmission into influencing the

state of the economy, Wilkins said.

     In that, she cited as one point, as the Bank has said in the past,

uncertainty about the effect rate hikes might have on consumer spending when

household debt is at record levels.

     Wilkins said the Bank now is trying to work on understanding various

triggers of financial instability, which "continues to be a blind spot."

--MNI Ottawa Bureau; +1 613 869-0916; email: yali.ndiaye@marketnews.com

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