Bank of Canada's Poloz: Jan rate cut "has bought us some time"

OTTAWA, March 26 (Reuters) - The Bank of Canada's January rate cut has bought the central bank some time to examine the effects of cheaper oil, Governor Stephen Poloz said on Thursday in remarks that underscored the possibility the bank will stay on hold next month.

Poloz repeated the bank's view that the negative effects of lower oil prices are beginning to appear and the positive effects will take longer to emerge.

"So we need to watch these competing forces play out in the economy, and the January rate cut has bought us some time to monitor the situation as it evolves," he said in the prepared text of a speech to the Canada-United Kingdom Chamber of Commerce.

"Some have characterized this as a move to 'data dependency'. I have to say I find this a bit strange. Data are always crucial in determining how the economy is progressing."

Explaining his decision to keep the overnight rate unchanged at 0.75 percent on March 4, Poloz said that after the January decision, inflation fell and output expanded as expected, while financial conditions eased and oil prices stabilized.

"This made us feel increasingly comfortable with the amount of insurance we had already taken out, which led to the decision to keep rates unchanged earlier this month," he said.

(Reporting by Randall Palmer and Leah Schnurr)