World Economy

BOC Urges Flexible Forex Rates

BOC Urges Flexible  Forex RatesBOC Urges Flexible  Forex Rates

Canada will have to “ride out” the economic storm that has plunged the dollar to the 70-cent US range, the central bank governor said, Yahoo reported. It will take time to adjust to the shock of low oil prices as it causes havoc with the economy, Bank of Canada Governor Stephen Poloz said. There is no simple fix but Canada’s flexible exchange rate can soften the blow for some parts of the economy, he said. The bank can also use “unconventional tools” to limit financial and inflationary threats including lowering the trend-setting interest rate into negative territory. Canada has lost more than $50 billion in national income since oil prices started their plunge in mid-2014, Poloz said. This has led to tens of thousands of layoffs in the oil patch, primarily in Alberta, where housing prices have fallen as well. The Canadian dollar’s all-time low was 61.79 US cents in January 2002.