Bank of Canada's Poloz Says There Is 'No Predetermined Path' for Rates -- Update

By Paul Vieira Features Dow Jones Newswires

After two consecutive interest-rate rises, the Bank of Canada now will work from a clean slate when making rate decisions as it contends with an uncertain outlook for inflation, Gov. Stephen Poloz said Wednesday.

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The biggest challenge for the central bank is managing an economy that is quickly approaching full capacity while inflation remains well below its target of 2%, Mr. Poloz said in prepared remarks he was set to deliver in St. John's, Newfoundland.

At a minimum, Mr. Poloz said, the two rate cuts it delivered in 2015 amid the oil-price shock were no longer needed. After increases in July and September on stronger-than-expected economic growth, the Bank of Canada's benchmark rate stands at 1%.

"But there is no predetermined path for interest rates from here," the governor said. "The appropriate path for interest rates in [Canada's situation] is very difficult to know, because there are a number of important unknowns around the inflation outlook."

The speech from Mr. Poloz, his first in more than four months, marks the second time in as many weeks senior central-bank officials attempted to manage expectations on the rate-policy front after a shift toward policy tightening. Last week, Bank of Canada deputy governor Timothy Lane said the central bank wanted to gauge the economy's response to steeper borrowing costs and a stronger Canadian currency when making rate decisions.

Write to Paul Vieira at paul.vieira@wsj.com

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(END) Dow Jones Newswires

September 27, 2017 12:28 ET (16:28 GMT)