The depreciation of the Canadian dollar is providing an important offset to the effects of weaker global demand and lower commodity prices, and the monetary policy actions taken in October and December (a 150-basis-point reduction in the policy interest rate) will provide timely and significant support to the Canadian economy.
At that time, the Board recognised that the pandemic would require an extended period of very accommodative monetary policy. Reflecting this, the Board's view was that the probability was extremely low that the conditions for an increase in the cash rate would be met within 3 years. Adopting a 3-year yield target reinforced that message.