Bank of Canada (BOC) may have held policy steady at last meeting, the governor Stephen Poloz pointed out that the bank is not out of ammunition, instead it has more tools now than ever before ready to be deployed if deemed necessary.

Canadian economy suffering uncertain times, at one hand it is suffering from lower energy prices, its key exports, Canadian manufacturing to US suffering tight competition from Mexican counterparts. Canadian unemployment even ticked up to 7.1% in November, with more than 35,000 jobs being lost.

Mr. Poloz, speaking in Toronto, counter the doubters, who point out that interest rate at 0.5%, just 25 basis points shy of record low in 2009, saying that the bank now has lots of unconventional policy tools at its disposal. These comments come in sharp contrast to the bank's 2009 stance, when it considered zero to be lower bound in policy.

Moves from other central banks over unconventional monetary policies might have influenced BOC.

Various options of BOC -

• Mr. Poloz seems to be more confident that the economy and Canadian financial markets could function under negative rates. Mr. Poloz said, "We now believe that the effective lower bound for Canada's policy rate is around -0.5%, but it could be a little higher or lower."
• Mr. Poloz also shared his openness to large scale asset purchase as he considers it to be a viable way to extend central bank's impact and place downward pressure on both long term rates and exchange rates.
• BOC even can do operations like funding for lending, similar to BOE and what it had done in mortgage market during 2008/09 crisis.
• Bank can even use forward guidance to assure and inform market about the bank's dovish bias, by setting some date or variable for policy tightening.

However, any immediate deployment is unlikely, since lower oil price has already pushed loonie to lowest in 11 years. Canadian Dollar is currently trading at 1.357 per Dollar.