Here in Quebec, and in central Canada more generally, the strong Canadian dollar and increased energy costs have posed a significant challenge to manufacturers and service providers facing international competition. The Bank closely follows developments in all sectors of the economy, partly through its quarterly Business Outlook Survey conducted by its regional offices, including the one here in Montréal.
The interest rate policy currently pursued by the Eurosystem, and also by the other European central banks, shows that the zero lower bound is not a fixed floor for central bank interest rates. That said, there is no disputing the possibility of a “flight to cash” if interest rates venture too far below zero.