OTTAWA – The Bank of Canada is reinforcing its hands-off position when it comes to controlling the loonie.
Bank governor Stephen Poloz says attempting to target the exchange rate would hurt the bank’s ability to pursue independent monetary policy in Canada’s best interests.
He says without a floating currency, prices, wages and unemployment could fluctuate wildly and that would create havoc for people and business.
So he says it is up to the market to determine exchange rates and the bank’s job to understand the context those rates provide as it works towards its inflation targets.
Economists have suggested that Poloz’s “dovish” talk on interest rates has helped take some of the shine off the loonie.
Poloz says though the bank is wary of the “serial disappointment” the global economy has delivered in recent years, it is cautiously optimistic about the exporting future.
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