Bank of Canada governor came out Wednesday in support of China's policy of gradually appreciating the value of it currency yuan, days before G20 finance ministers begin talks this weekend in Seoul.
"We understand the reasons for China's position, we understand the difficulty of movement, and we understand the importance of a degree of gradualism in the movement," Mark Carney, head of Canada's central bank, said.
He believes G20 will eventually be able to reach an agreement that will prevent a so-called "currency war" in which countries would devalue their currencies in bids to make their exports more competitive.
Carney's remarks came just as U.S. officials demanded a commitment from G20 finance ministers to allow their currencies to "float" to find their market values.
"It may not look like we're actually making progress because we're getting down into the real policy decisions," he told a press conference after the release of the central bank's latest Monetary Policy Report Wednesday.
"This discussion, which is spilling over more into the public domain, on exchange rates is getting more tangible as well. I think we just have to be more relentless on this, constructive in the room, and we will ultimately, we should ultimately, make progress."
Carney said this following the Bank of Canada's announcement that it is unlikely to raise interest rates any time soon.
"At this time of transition in the global recovery, with a weaker U.S. outlook, constraints beginning to moderate growth in emerging-market economies, and domestic considerations that are expected to slow consumption and housing activity in Canada, any further reduction in monetary policy stimulus would need to be carefully considered," the central bank said in its report.
The bank expects the economic recovery to be more gradual than its July projection, with growth of 3.0 percent in 2010, down from the previous forecast of 3.5 percent.
The bank also reduced its forecast for growth in 2011 to 2.3 percent, down from 2.9 percent.
"This more modest growth profile reflects a more gradual global recovery and a more subdued profile for household spending," the report said.
It now expects the economy to return to full capacity by the end of 2012, rather than the beginning of 2012 as it had predicted in July. And inflation is forecast to remain below 2 percent for the next two years.
The central bank on Tuesday kept its overnight interest rate unchanged after raising it to 1 percent over its last three meetings. "This leaves considerable monetary stimulus in place," the bank said.
"We understand the reasons for China's position, we understand the difficulty of movement, and we understand the importance of a degree of gradualism in the movement," Mark Carney, head of Canada's central bank, said.
He believes G20 will eventually be able to reach an agreement that will prevent a so-called "currency war" in which countries would devalue their currencies in bids to make their exports more competitive.
Carney's remarks came just as U.S. officials demanded a commitment from G20 finance ministers to allow their currencies to "float" to find their market values.
"It may not look like we're actually making progress because we're getting down into the real policy decisions," he told a press conference after the release of the central bank's latest Monetary Policy Report Wednesday.
"This discussion, which is spilling over more into the public domain, on exchange rates is getting more tangible as well. I think we just have to be more relentless on this, constructive in the room, and we will ultimately, we should ultimately, make progress."
Carney said this following the Bank of Canada's announcement that it is unlikely to raise interest rates any time soon.
"At this time of transition in the global recovery, with a weaker U.S. outlook, constraints beginning to moderate growth in emerging-market economies, and domestic considerations that are expected to slow consumption and housing activity in Canada, any further reduction in monetary policy stimulus would need to be carefully considered," the central bank said in its report.
The bank expects the economic recovery to be more gradual than its July projection, with growth of 3.0 percent in 2010, down from the previous forecast of 3.5 percent.
The bank also reduced its forecast for growth in 2011 to 2.3 percent, down from 2.9 percent.
"This more modest growth profile reflects a more gradual global recovery and a more subdued profile for household spending," the report said.
It now expects the economy to return to full capacity by the end of 2012, rather than the beginning of 2012 as it had predicted in July. And inflation is forecast to remain below 2 percent for the next two years.
The central bank on Tuesday kept its overnight interest rate unchanged after raising it to 1 percent over its last three meetings. "This leaves considerable monetary stimulus in place," the bank said.
