Nonetheless, the BSP has prepared solutions within its regulatory purview which support the new economy set up and ensure that the pace of digital transformation proceeds hand in hand with caution and adequate risk management.
In a medium-sized, open economy, like Canada’s, a good deal of the impact of monetary policy actions is channelled through the exchange rate. But because financial markets do not always respond to events in completely predictable ways, we do not know exactly how interest rates and the exchange rate will move and interact.