UPDATE 2-Bank of Canada Governor Stephen Poloz to step down when term ends next year


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(Adds background, analyst reaction)

By Kelsey Johnson and Fergal Smith

OTTAWA/TORONTO Dec 6 (Reuters) – Bank of Canada Governor Stephen Poloz will step down when his mandate expires in June, the bank said on Friday, and the front-runner in the race to take his place could become the first woman to head the country’s central bank.

Many economists and market strategists surveyed by Reuters this week said Senior Deputy Governor Carolyn Wilkins, who has regularly appeared alongside Poloz at press conferences and government hearings, could be his successor.

Poloz, 64, who is in the final year of a seven-year term, will not seek a reappointment and a process to select the next governor has begun, the bank’s board of directors said in a statement.

The board of directors oversees the selection process of a new governor, but the finance minister and the prime minister have the final say.

Other potential candidates include Tiff Macklem, a former senior deputy governor and now dean of a top Canadian business school, and Jean Boivin, a past deputy governor and current head of BlackRock Investment Institute.

Poloz, who brought a combination of folksiness and traditional ambiguity to the job, said that during his tenure the bank had “created the conditions for steady economic growth, low unemployment, and inflation close to target through very challenging times,” according to the statement.

On his watch, Canada’s commodity-linked economy weathered a sharp downturn in oil prices in 2014, the softening of a red-hot housing market and a more uncertain outlook for global trade.

“He managed the whole process very well,” said Hosen Marjaee, a senior portfolio manager at Manulife Asset Management, in an interview.

Poloz brought “a unique perspective on markets and economies” and his response to the changing trade environment and the impact of the U.S economy on Canada “has been flexible and pragmatic,” said Marjaee.

The Bank of Canada has held its overnight interest rate steady since October 2018, even as several of its counterparts, including the U.S. Federal Reserve, have eased.

“There’s change going into 2020, the markets could easily start to speculate that perhaps somebody more willing to ease could come into the seat,” said Derek Halpenny, head of research, global markets EMEA and international securities at MUFG Bank in London.

Unlike some of its global peers, Canada’s inflation rate is near the central bank’s 2% target, while the economy is operating near capacity. (Reporting by Kelsey Johnson in Ottawa and Fergal Smith in Toronto Editing by Chizu Nomiyama and Steve Orlofsky)


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