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MNI: BOC Says Balancing Risks of Over- And Under-Tightening

(MNI) OTTAWA
Deputy Governor Toni Gravelle's `day after' speech echoes Wednesday's decision to hold policy rate and gives wider discussion on immigration and inflation.

Bank of Canada Deputy Governor Toni Gravelle kept a consistent message Thursday about progress slowing inflation and the potential for another interest-rate hike following Wednesday's decision to keep borrowing costs at the highest since 2001, while noting record immigration has boosted the economy's potential output.

"Our decision to maintain the policy interest rate at 5% reflects our best efforts to balance the risks of over- and under-tightening. We don’t want to slow the economy too much, but we also don’t want Canadians to continue living with the pain of high inflation," according to text of a speech he's giving in Windsor, Ontario. The remarks also reiterated "we remain prepared to increase the policy rate further if needed" and "the economy no longer looks to be in excess demand." Core inflation has slowed to about 3% on an annualized three-month basis in the latest figures for October but "we need to see further progress," Gravelle said.

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Bank of Canada Deputy Governor Toni Gravelle kept a consistent message Thursday about progress slowing inflation and the potential for another interest-rate hike following Wednesday's decision to keep borrowing costs at the highest since 2001, while noting record immigration has boosted the economy's potential output.

"Our decision to maintain the policy interest rate at 5% reflects our best efforts to balance the risks of over- and under-tightening. We don’t want to slow the economy too much, but we also don’t want Canadians to continue living with the pain of high inflation," according to text of a speech he's giving in Windsor, Ontario. The remarks also reiterated "we remain prepared to increase the policy rate further if needed" and "the economy no longer looks to be in excess demand." Core inflation has slowed to about 3% on an annualized three-month basis in the latest figures for October but "we need to see further progress," Gravelle said.

Keep reading...Show less