Askume, Sept 15 – Bank of Canada Governor Tiff Macklem has opened the door to accelerating interest rate cuts, the Financial Times reported on Sunday.
In an interview with the newspaper, McCallum said rate setters were concerned about the potential impact of lower oil prices on the Canadian labour market and the economy.
“As you get closer to your target, your risk management calculations change,” McCallum told the newspaper. “You become more concerned about downside risks. The labor market also signals some downside risks.”
A year after keeping its main policy rate at 5%, the highest level in more than two decades, the Bank of Canada has cut its key policy rate by 25 basis points three times since June, adding to a 75 basis point cut earlier this month to 4.25% in 2017 .
Canada’s overall inflation rate fell to a 40-month low of 2.5% in July.
McCallum said last week that although the bank’s growth appears to be strong, there are some downside risks to expected growth.
“Trade disruptions could mean significant deviations from the 2 percent inflation target,” he said in a speech to the Canadian-British Chamber of Commerce in London.
