MNI POLICY:Gov Poloz:Pol Rate 'Appropriate For The Time Being'>

By Courtney Tower

     OTTAWA (MNI) - Following are the key points from Bank of Canada 

Governor Stephen Poloz' year-end economic progress report to financial 

analysts in Toronto Thursday, following Wednesday's decision to maintain 

the policy interest rate at 1.75%: 

     - Poloz said the present policy rate is "appropriate" but added the 

emphasis: "for the time being." He reaffirmed the central bank would be 

"decidedly data dependent." He also repeated that "the persistence of 

the oil price shock" will be among the important decision factors ahead. 

     - Poloz said Canada's financial system risk remains about as it was 

six months ago. However, he did add the new statement that for the 

energy provinces of Western Canada a painful adjustment is developing. 

That adjustment would have a meaningful impact on the national economy. 

Still, the net effects of the lower oil prices being experienced will be 

lower than they were during the oil price shock of 2015, he said. 

     - Poloz said the long-identified chief vulnerability for Canada, 

housing and record household debt, is stabilizing with "far fewer" 

mortgages being loaned at the highest debt-to-income ratios. However, 

the pileup of debt would last for many years. 

     - Poloz sounded a warning he has made often before, about trade 

risks: rising tariffs hurt all, both those who set the tariffs and those 

who suffer them, he said. 

     - For the United States, on which the bulk of Canada's exports 

depend, he said there has been some risk of "inflation surprise" because 

of the response of the U.S. economy to fiscal stimulus measures. 

However, he added, "our outlook remains that the U.S. economy will 

moderate to a more sustainable pace next year and into 2020, and that 

inflation expectations remain well anchored." 

--MNI Ottawa Bureau; yali.ndiaye@marketnews.com

[TOPICS: M$C$$$,MACDS$]