In particular, exports witnessed robust growth despite not so favourable an external environment. Growing export of services and remittances have helped maintain a marginal surplus in the current account in spite of a growing trade deficit. Reflecting the improved fundamentals, capital inflows have been buoyant, but manageable for the conduct of monetary policy. The health of the financial sector has also been improving.
Other things being equal, a persistently strong Canadian dollar would reduce real growth and delay the return of inflation to target. The Bank will assess the balance of risks to inflation in its upcoming MPR. Even though we are at the effective lower bound for our policy rate, the Bank retains considerable flexibility in the conduct of monetary policy.