Stephen Poloz says slashed interest rates are saving economy long-term

LIMA, Peru – Stephen Poloz says the Bank of Canada helped navigate the country through the oil price shock by implementing two rate cuts, including one that rattled the markets.

He makes his remarks on Saturday to an international audience at a meeting of the Institute of International Finance in Lima, Peru.

He says the Bank of Canada adjusted its strategy in the face of dropping oil prices by lowering interest rates.

Poloz says lowering the rates meant a risk to household debt, but that it also set up the economy to recover more quickly.

The Bank of Canada cut its key lending rate twice this year, first in January and again in July, bringing the rate from one per cent down to half of a per cent.