Senior deputy governor Carolyn Wilkins made the remarks in a speech in Ottawa on Tuesday — as many observers expect the central bank is preparing to drop its rate even further next month.
“If potential output growth turns out to be lower than we think, we have the tools to bring inflation back to target,” said Wilkins, who expects the Canadian economy to grow with help from the lower loonie and a stronger U.S. economy.
She predicted Canada’s non-energy sector will lead the growth.
TD Bank senior economist Randall Bartlett said in a note to investors, “we expect that the Bank of Canada will take out additional insurance and reduce the overnight rate by a further 25 basis points at its upcoming interest rate announcement in March, 2015,” Bartlett wrote.
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