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By Courtney Tower
     OTTAWA (MNI) - Following are the key points from Bank of Canada 
Governor Stephen Poloz's speech to the Greater Victoria Chamber of 
Commerce in British Columbia, Wednesday, in which he outlined the key 
factors that will influence the Bank's next policy rate decision July 
     -- "We are working to incorporate in our projections the effects of 
the recently announced U.S. steel and aluminum tariffs, along with 
retaliatory measures both in Canada and globally," he said. The BOC is 
also analyzing individual-level data "to understand how the new lending 
guidelines in Canada are affecting the housing market and mortgage 
renewals." He expects "these issues to figure prominently in our 
upcoming deliberations." 
     --On Forward guidance, Poloz said it provides "a false sense of 
certainty to financial markets." And while publishing such as a 
projected path for policy rates could help reduce uncertainty in 
financial markets, it "reduces the reaction of markets to economics 
news. It suppresses the signalling role of financial markets." In the 
current environment, forward guidance would put BOC's credibility at 
risk. Instead, ending routine forward guidance has strengthened market 
signalling. Given today's "complex uncertainties", market signals have 
"never been more valuable to policy makers." 
     --On May 30 decision, he said the shift in language reflected  
increased confidence that the economy was performing as expected and 
that higher interest rates were warranted. He said financial markets 
understood that message. However, he underlined that since 2014, each 
interest rate announcement has been drafted "on a blank page" to avoid 
"getting locked into repeating specific language." 
     -- In today's climate of great uncertainty, "setting monetary 
policy is a matter of risk management," Poloz said. The BOC has to be 
"honest and transparent about what we know and what we do not know,"                                                               
so that markets could judge and decide outlooks and not be told what the 
outlooks would be. He said there is a "litany of things we simply don't 
know." In that context, the BOC is "particularly data-dependent right 
     --The speech otherwise focused on trying to make its communications 
more transparent and "readable". Most of what goes out is rated, by 
software that the Bank has employed, to be written at a university 
level, in other words not "accessible to the majority of Canadians." 
This speech, he said, "rates at about a Grade 12 level. So, the Bank now 
is working on clarifying its website, starting this fall with a new 
financial system hub aimed at broad audiences to give updates on the 
financial system. It will join a new digital-only publication that he 
calls "The Economy, Plain and Simple." 
     --MNI Ottawa Bureau; 

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