Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Carney Says Canada Monetary Policy ‘Not Pre-Ordained’

Bank of Canada Governor Mark Carney reiterated today that further tightening of monetary policy isn’t “pre-ordained.”

Carney, who made the comments in a prepared statement for his Senate testimony, also said the time for Canada’s extraordinary monetary policy “is passing.”

The bank’s removal of its “conditional commitment” to keep interest rates unchanged “represents a tightening of monetary policy,” Carney told Senators. “Going forward, nothing is pre-ordained. The extent and timing of any additional withdrawal of monetary stimulus will depend on the outlook for economic activity and inflation.”

Investors increased bets on a June 1 rate increase after the bank’s April 20 policy announcement dropped the pledge to keep the key interest rate at 0.25 percent through June, and said the timing of further action would depend on economic growth and inflation. Since then, Canada has reported an unexpected slowing of inflation and Greece’s debt crisis has led to declines in the Canadian dollar and stock prices.

The “pre-ordained” phrase and the reference to already having reduced monetary stimulus reduces the chance for a June rate increase, said Douglas Porter, an economist at BMO Capital Markets in Toronto. “Those lines were quite important,” Porter said. “Clearly, the bank wants to keep its options wide open for June.”

‘Productive Negotiations’

Carney told Senators that “productive negotiations” between Greece, the European Union and International Monetary Fund are ongoing. He added that while he doesn’t expect those talks to fail, if they did, it would imply higher interest rates in Canada, more volatile financial markets, and a negative impact on Canadian economic growth.

“It is a risk,” Carney said, adding it “is not a scenario we would envision at all.”

Carney also said that global economic demand could fall if countries with large deficits act to close their budget gaps and other countries -- particularly emerging markets -- don’t take steps to boost their demand. Global deficits will push interest rates higher, and are “arguably” the largest risk to the global recovery, he said.

Persistent strength in the Canadian dollar also remains a risk to the country’s outlook, Carney said. He added that the U.S. dollar will remain the world’s reserve currency for the foreseeable future, as there is no “viable” replacement for it.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.