Jump to content


Recommended Posts

Sept. 25 (Bloomberg) -- Bank of Canada Governor Mark Carney said he is concerned when the country’s currency moves away from “fundamental” levels, and said Group of 20 nations should stay the course on stimulus packages, as world leaders gather in Pittsburgh for two days of talks.


Carney declined to comment on the currency’s recent level, according to the transcript of an interview Carney gave to the Canadian Broadcasting Corp.


“We get concerned if the currency appears to move away from fundamentals,” Carney said, according to the transcript, which was released to reporters late Thursday. “I’m not going to be drawn on a specific level for the Canadian dollar.”


The Canadian currency weakened 0.4 percent to C$1.0932 per U.S. dollar at 9:47 a.m. in Toronto, from C$1.0892 yesterday. One Canadian dollar buys 91.48 U.S. cents. In a July report, the bank said its outlook assumed the Canadian dollar would average 87 cents through 2011.


Bank of Canada officials have said since June that the currency threatens to derail an economic recovery from the country’s first recession since 1992. Deputy Governor David Longworth repeated a commitment on Sept. 23 to keep the bank’s key lending rate at a record low 0.25 percent through June 2010 unless the inflation outlook shifts.


‘Absolutely Essential’


Carney said the central bank still has tools to boost the economy if annual consumer prices, which the central bank predicts will fall 0.7 percent this quarter, look as if they won’t return to target. The central bank has an inflation target over the medium term, and Carney said it is “absolutely essential” the bank meet its inflation goals.


“If we have to provide additional stimulus and we think that this situation is persistent, we are going to do our job,” Carney said in an interview with anchor Peter Mansbridge of the CBC. With the policy rate as low as it can go, Carney said the bank opted to give a conditional commitment about the interest rate path, and could still resort to “more unconventional policies, quantitative easing,” if needed.


Asked about Canada’s record C$55.9 billion ($51.3 billion) budget deficit this year, Carney said that Group of 20 leaders agreed to a strategy of implementing stimulus packages and the strategy should be continued.


“We have started on this path but we are not all the way through, and they need to stay the course,” Carney said.


‘No Viable Alternative’


He also repeated there won’t be a shift to replace the U.S. dollar as the world’s “reserve” currency, used as the benchmark for financial dealings, anytime soon.


“There is no viable alternative to the U.S. dollar at the moment, as a reserve currency,” he told the CBC. “So it’s not a question of right, but it’s a question of reality.”


CBC showed part of the interview earlier this week. The full interview is scheduled to be broadcast on the CBC Newsworld network on Sept. 26.


In the parts of the interview broadcast earlier, Carney said there are signs of economic growth in all major global regions, and the rebound still lacks signs of “self- sustaining” private demand to underpin it. He also said that Canadian companies need to continue restructuring efforts, and predicted that while the jobless rate will keep rising in Canada, it is not a “foregone conclusion” that it will reach 10 percent.


(Courtesy of Bloomberg)


I can't stand this. :mad: :mad: :mad:

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Create New...