TOKYO, June 24, 2016 /PRNewswire/ -- Regular discussions on a range of subjects including policies, debt and investment need to take place between the two entities said Poloz.
Speaking at a lecture to the Canadian Economics Association in Ottawa, he pointed to the country's inflation target, which is set by both the BOC and the federal government.
"In certain areas there needs to be frequent communication," Poloz said, "Both institutions have common economic goals, why not sit down and address strategy together?"
He added that the financial markets could only handle a certain amount of debt from both the private and public sectors, so coordination is vital.
Many analysts believe Poloz is correct. Michael Lane - Global Co-Head of the Investment Management Division at Shizuoka Capital Wealth Management commented on the Governors lecture.
"Fiscal and monetary policies operate within the bounds of certain dynamic combinations. If the government and the central bank are not on the same page with regard to important policies you will end up with medium term economic stability risks," said Lane.
Due to the current oil glut and declining prices, the Canadian economy has been somewhat hobbled, leading to the BOC slashing interest rates twice in 2015 to protect the nation's economic integrity.
Poloz later told reporters, "If you keep cutting interest rates once they are below zero you don't really see any benefit. In the current economic climate, we need to maintain stimulus at a high level."
Poloz has been relatively pleased by the financial landscape south of the border, and said a strong United States economy would always help Canadian recovery. The U.S. buys nearly 80 per cent of Canadian exports, so this is not surprising in the least.
The BOC chief said most U.S. data in 2016 had been "fairly solid" although he expressed slight disappointment at recent job figures.
In a short back and forth with the audience after the lecture Poloz revealed that even a very slender growth in the economy would be "extremely encouraging". In an effort to realise this growth, the government recently announced a budget that was described by analysts as "stimulus-rich", resulting in a deficit larger than previously thought.
Shizuoka Capital Wealth Management
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SOURCE Shizuoka Capital Wealth Management