A prominent example was the Bank of Canada’s commitment in April 2009 to keep its policy rate unchanged at 1/4 percent until the end of the second quarter of 2010, depending on the outlook for inflation.3 This commitment was successful in clarifying for market participants the bank’s views on the likely path of policy rates and appears to have helped reduce longer-term interest rates, thus providing additional policy accommodation.
The second aspect of seignorage payment has to do with the payment to Namibia for the circulation of the rand in her territory. With the decline in the circulation of the rand after the introduction of the Namibian national currency, the compensation derived by Namibia for the use of the rand has also contracted significantly.