Even if import prices react strongly to exchange rates, a monetary policy stance that is sufficiently reactive to inflation can insulate consumer price inflation from the effects of a shock that causes the exchange rate to depreciate.
However, its near-term dynamic has changed and the composition of growth is now slightly less favourable for Canada. •  Uncertain global and domestic economic conditions are delaying the pickup in exports and business investment in Canada. This leaves the level of economic activity lower than the Bank had been expecting.