13 Aug 2015
BoC need to do more: QE here we come?
FXStreet (Guatemala) - In a recent commentary from the world's largest money manager, BlackRock Inc, Canada could be heading towards the same policy of its brother nation, the United States, as well as in Japan and Europe.
Canada as an economy is in a spell of stagnation while commodity prices weigh on the nation and the currency. Quantitative easing has been adopted by the states as a means to lift the economy out of recession and stagnation and has done so successfully to the point where policy at the FOMC has shifted from ultra low rates towards a potential rate hike this year as inflation remains on target.
Canada was in the pits of recession at the start of the year and has needed to cut the benchmark interest rates twice already to encourage cheaper money in a stagnated economy. But rates can only go so low and subsequent and more aggressive measures may be required. Poloz has already hinted at such measures while explained that the first measure would likely come in “forward guidance”.
Canada as an economy is in a spell of stagnation while commodity prices weigh on the nation and the currency. Quantitative easing has been adopted by the states as a means to lift the economy out of recession and stagnation and has done so successfully to the point where policy at the FOMC has shifted from ultra low rates towards a potential rate hike this year as inflation remains on target.
Canada was in the pits of recession at the start of the year and has needed to cut the benchmark interest rates twice already to encourage cheaper money in a stagnated economy. But rates can only go so low and subsequent and more aggressive measures may be required. Poloz has already hinted at such measures while explained that the first measure would likely come in “forward guidance”.