Bank of Canada Governor Warns Global Imbalances Pose Financial Stability Risks

Bank of Canada Governor Tiff Macklem delivered a sobering warning about deepening imbalances in the global economy, saying that leaving them unaddressed could significantly intensify financial stability risks. He drew particular attention to large trade imbalances between the world's major economies, especially between the United States and its key trading partners. High levels of public and corporate debt in developed nations were also cited as a source of vulnerability should interest rates rise further or economic growth slow. Macklem stressed that central banks must remain vigilant and should not ease their commitment to price stability prematurely. His remarks were interpreted by markets as a signal that monetary authorities in developed countries are not in a hurry to cut rates, even as inflation gradually moderates. For emerging markets, including Kazakhstan, this implies a persistently challenging environment for external borrowing.