The agency says that monetary policy flexibility has been proven by the recent cuts in interest rates and suggests that continued growth for the economy could require a further cut.
Despite high levels of household debt and “pockets of real estate overvaluation” that pose a risk to the economy, Fitch concludes that “without a broad-based shock to employment or a sharp rise in interest rates, the risks are manageable.”
The report also says that Canada Mortgage and Housing Corporation has its own capital buffers and would only be at risk from a “severe economic shock.”
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Credit ratings agency Fitch says that Canada has an “advanced, well diversified and high-income economy” and has affirmed its AAA rating.