They began accelerating mid-year, reaching extremely high levels for natural gas in Europe, where it was mostly imported from Russia. This phenomenon gained in intensity and persistence with Russia’s invasion of Ukraine, and called for an acceleration in the process of monetary policy normalisation.
The point I want to emphasize here is that with these policy anchors in place, a floating exchange rate can be a tremendous asset for an economy by helping to keep total supply and demand in balance. Conclusion In closing, let me say again that Canada has been a pioneer both in having a floating exchange rate and in operating with inflation targets.