9 While the Bank currently has a securities-lending facility (whereby it makes available from its balance sheet Government of Canada securities that are temporarily in high demand in the market), the loans under this facility have a term of one business day and are intended to address stresses in the repo market for a single security.
Controlling the effects of such inflows on domestic credit and asset markets is especially difficult in those countries that, by choosing to peg their exchange rate, import the monetary policy stance from abroad even though it may not be appropriate to domestic conditions (Figure 6). This raises two difficult questions.