OTTAWA?The Bank of Canada wouldn't respond mechanically to any future move by the U.S. Federal Reserve to raise interest rates, a senior central bank official said Wednesday.

In prepared remarks for a speech in Waterloo, Ontario, Deputy Governor Timothy Lane said tighter monetary policy in the U.S. would lead to higher market interest rates globally, producing a tightening effect for Canada. At the same time, he said, a U.S. rate increase should result in a stronger U.S. dollar, making Canadian exports more competitive.

Mr. Lane said the Bank of Canada wouldn't consider those impacts in any "mechanical" way. Instead, the central bank can observe the effects of a U.S. move on interest rates and exchange rates before making a policy decision.

"We are free to adjust our policy interest rate in the context of Canadian economic conditions?and, in particular, do not need to move in step with the Federal Reserve," Mr. Lane said.

The deputy governor's comments were included in a speech on financial globalization.

Write to Kim Mackrael at kim.mackrael@wsj.com

(END) Dow Jones Newswires

November 16, 2016 12:55 ET (17:55 GMT)

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