This is what Canada’s monetary policy framework now provides: greater focus, greater accountability, and greater discipline. The two key elements of our current framework are (i) an explicit monetary policy goal – the 2 per cent target for inflation – and (ii) a flexible exchange rate.
BIS Review 63/2010  7  Canada’s flexible exchange rate gives the Bank of Canada the monetary policy independence that is required to successfully pursue and attain its inflation objective. The flexible exchange rate also serves as an automatic buffer, helping to cushion the economy and dissipate the effects of the commodity shock.