And, as has been the case in the United States, investor sentiment and the functioning of financial markets abroad have improved somewhat. As economic activity weakened during the second half of 2008 and prices of energy and other commodities began to fall rapidly, inflationary pressures diminished appreciably. Weakness in demand and reduced cost pressures have continued to keep inflation low so far this year.
Eventually, this considerable monetary stimulus will have to be reduced; that is, at some point, interest rates will have to rise. But as I said, the second type of exchange rate movement appears to have gained relative importance in recent months, which means that aggregate demand in Canada will be weaker than we had expected last  4  BIS Review 10/2005  autumn.