Thursday, June 23, 2011

Bank of Canada: Comments on Greece and Canadian Economy

Bank of Canada: Comments on Greece and Canadian Economy

Though Bank of Canada’s chief Mark Carney called yesterday the situation in Greece “manageable” in the context of the European Union, he warned that in case the euro zone’s debt crisis escalates, Canada will be exposed trough indirect links with banks in other countries.

So, Carney joined Finance Minister Jim Flaherty who had earlier proposed to create a “firewall” around Greece to ensure the nation won’t contaminate the global financial system.

Carney projects Canadian economic growth to slow and inflation to remain above 3% (BoC target is at 2%) in the short term. Later this year the nation’s economic should gain pace, says the central banker. It’s also necessary to note that Carney underlines that Canada’s central bank retains the flexibility to hike interest rates if necessary.