(Adds details on Bank of Canada governor's comments)
April 14 (Reuters) - The governing council of the Bank
of Canada discussed raising interest rates at its policy meeting
earlier this week before deciding to leave them on hold, the
central bank's governor, Tiff Macklem, said on Friday.
Asked whether any council members were in favor of hiking
rates at the meeting, Macklem said: "When I say that we've
discussed whether we've done enough, that does imply that one of
the things we discussed is whether we need to raise rates."
Macklem spoke to reporters from Washington where he was
attending the annual International Monetary Fund meetings.
On Wednesday, the Canadian central bank kept its benchmark
interest rate at 4.50%, as expected, but struck a hawkish tone,
playing down market expectations for a rate cut this year as the
risk of a recession diminished.
Macklem reiterated on Friday that interest rates may
need to stay "higher for longer" to get inflation back to the
central bank's 2% target.
Asked about quantitative tightening, Macklem said rate
cuts would not be a barrier to shrinking the central bank's
balance sheet so long as the purpose was to normalize rates, or
move them closer to a neutral setting, rather than stimulate the
economy.
The central bank estimates the neutral interest rate --
one that neither stimulates nor constrains the economy -- to be
a range between 2% and 3%.
(Reporting by Steve Scherer and Fergal Smith
Editing by Chris Reese and Leslie Adler)
