A transparent policy framework greatly enhances our ability to steer financial conditions and, hence, ultimately ensures the effective transmission of monetary policy in the pursuit of our price stability objective.
When the U.S. Federal Reserve lowered its target interest rate three times between September and November, because of concerns about a possible “credit crunch” and an expected slowing in their economy, we followed with similar reductions in our Bank Rate. These cuts were appropriate, given the importance of the U.S. economy to Canada, our continued low inflation rate, and the improving international financial climate.