Comments from Bank of Canada Deputy Tim Lane:
- There’s risk low oil prices could add to deflationary pressures in Europe and Japan
- Lane says BOC will look through oil drop effect on CPI
- Decline in oil prices overall is beneficial to world economy
- Canadian economy has yet to reach point where growth is self-sustaining
- CAD depreciation will help cushion economy from oil impact
- We see important risks to Canadian economy from oil and commodity price declines
These are dovish comments but the market has already factored in pain in the Canadian economy from oil and slower rate rises. The equation would begin to change if the BOC started mulling rate cuts but that’s not on the table at the moment.
