Monetary policy response So, what can and should the Bank of Canada do about the exchange rate in times of international financial turbulence and major external shocks? First of all, let me remind you that the objective of Canadian monetary policy is to hold the rate of inflation within a range of 1 to 3 per cent.
This target, jointly agreed upon by the government and the Bank of Canada, reflects the conclusion that low inflation will contribute to a stronger, more stable economic performance over time. If we are to fulfill our commitment to keep inflation low and stable, monetary policy must remain focused on that objective.