Tiff Macklem, in his first public appearance as governor of the Bank of Canada, said on Tuesday the bank remains focused on using its policy tools, including low interest rates, to support the Canadian economy’s recovery from the COVID-19 pandemic.
“For now and the foreseeable future, we are focused on providing monetary stimulus and delivering low interest rates to support the recovery,” Macklem, who officially took over on June 3, told a parliamentary committee.
He also said the central bank would provide an updated outlook for output and inflation at its July 15 rate decision, officially Macklem’s first, suggesting that the bank would again delay detailed forecasts.
“Given the unknown course of the pandemic, I expect this will be more of a scenario than a forecast and will also include a discussion of the key risks,” he said.
The Bank of Canada slashed its key interest rate three times in March to a record-low 0.25%. It held rates steady earlier this month and said the Canadian economy appeared to have avoided worst-case scenario projections.
Macklem also said that while job growth was expected to accelerate across Canada, not all of the some 3 million jobs lost to COVID-19 shutdowns would return.
“You can expect purchasing power and confidence of Canadians ... to be severely affected,” he said. “I would stress that even the good case is still pretty bad. We’ve seen an unprecedented decline in economic activity and it’s a long way back.”
Macklem acknowledged that the Consumer Price Index was not giving an accurate picture of inflation, and said the bank was working with Statistics Canada to “get more representative figures to what Canadians are experiencing.”
The Canadian dollar strengthened across the board against G10 currencies on Tuesday, including a 0.2% advance against the U.S. dollar to 1.3547, or 73.82 U.S. cents.