BRIEF-Bank of Canada governor says we could potentially lower the effective lower bound for rates even without going negative

BRIEF-Bank of Canada governor says we could potentially lower the effective lower bound for rates even without going negative

Reuters  | Nov 26, 2020 17:30

BRIEF-Bank of Canada governor says we could potentially lower the effective lower bound for rates even without going negative

Nov 26 (Reuters) -

* BANK OF CANADA GOVERNOR TIFF MACKLEM SAYS BANK HAS COMMITTED TO STOP BUYING GOV'T BONDS WHEN RECOVERY IS WELL UNDER WAY, MOST LIKELY BEFORE INFLATION RATE HITS 2% TARGET

* BOC'S MACKLEM: WE HAVE QUITE A LOT OF ROOM TO BUY MORE GOVERNMENT DEBT

* BOC'S MACKLEM: THERE ARE OTHER THINGS WE CAN DO, WE DO HAVE THE CAPACITY TO DO MORE THINGS IF NEEDED; AMPLE POTENTIAL TO SCALE UP QE IF THAT WERE NEEDED

* BOC'S MACKLEM: NEGATIVE RATES ARE IN OUR TOOLKIT BUT THEY WOULD NOT BE "TERRIBLY HELPFUL AT THIS TIME"

* BOC'S MACKLEM: WE COULD POTENTIALLY LOWER THE EFFECTIVE LOWER BOUND EVEN WITHOUT GOING NEGATIVE, IT'S AT 25 BPS, IT COULD BE A LITTLE BIT LOWER

* BOC'S MACKLEM: IT'S POSSIBLE THAT CONSUMER SPENDING COULD BE GREATER THAN EXPECTED IF THERE IS A VACCINE AND ECONOMY COULD RECOVER FASTER THAN FORECAST

* BOC'S MACKLEM: ASKED ABOUT POSSIBILITY OF STAGFLATION IN CANADA, SAYS DISINFLATIONARY ASPECTS OUTWEIGH PUSH ELEMENTS

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