(MENAFN- Baystreet)
Bank of Canada Governor Tiff Macklem has signaled that interest rates may be as low as they can go for the time being.
The head of Canada's central bank says interest rates are now at a level where they can boost the economy while also keeping inflation under control.
The Bank of Canada lowered its trendsetting overnight interest rate by 25 basis points to 2.25% on Oct. 29 and has taken the rate down more than a full percentage point over the past year.
Speaking in Toronto, Macklem signalled that further interest rate cuts will likely be harder to justify moving forward and that the Bank of Canada is limited in how much further it can cut.
“We think monetary policy is in about the right place to provide some support, while keeping inflation well controlled,” he said.“Our priority is to make sure that the tariff problem doesn't become an inflation problem.”
Macklem added that tariffs are causing an economic slowdown in the near-term but are likely to cause inflation over the longer term, posing challenges for the central bank.
Macklem says that the overnight interest rate is now at the low end of the Bank of Canada's neutral range, meaning it provides some economic stimulus while keeping inflation controlled.
The governor used his latest remarks to again say that Canada needs to address long-standing productivity issues and raise incomes.
The Bank of Canada is scheduled to make its final interest rate decision of the year on Dec. 10.

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