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BoC Poloz downplays rise in the nation's inflation

FXStreet (Bali) - Bank of Canada Governor Stephen Poloz said over the weekend that there is no reason to believe that the recent rise in the country's inflation rate - Sept 19 saw core CPI at the highest since 2012 - will continue as the economy still shows excess capacity.

As Bloomberg reports: "The rise largely refects one-off increases such as the effects of a weaker Canadian dollar, Poloz told reporters in Cairns, Australia, following a meeting of officials from the Group of 20. The inflation rate would be expected to drop as long as the economy operates below its potential, he said."

Poloz was quoted, via Bloomberg, as saying: “So much of the uptick in inflation that we’ve seen over the last five or six months has been in what we call one-off categories. We know the Canadian economy has a significant amount of room to grow.”

Poloz added: "There is excess capacity both in output space and in labor market. The idea is to get the economy back to normal, and then inflation would be sustainably at target, not just accidentally.”

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