Browse press

The immediate impact and the fallout from last September's events introduced new layers of uncertainty into the economic picture, compounding the effects of a deepening global economic slowdown that had become more evident during the summer.

In a speech to the Saskatoon and District Chamber of Commerce, Bank of Canada Governor David Dodge said today that Canada's inflation-targeting system has led to many benefits for the Canadian economy. The Governor detailed those benefits, which were confirmed when the Bank and the Government of Canada renewed their inflation-control agreement last year.

One of the main benefits of the targets is that they help the economy to run more smoothly when there are surprises in the level of demand for Canadian goods and services.

The Governor highlighted the global slowdown as the major economic challenge of the past year. But he said that there were also key changes within the Bank of Canada related to the implementation of monetary policy. In particular, he spoke of the success of the Bank's new system of eight fixed dates per year for announcing interest rate decisions. He also set out in detail the process that leads to those decisions.

The main economic concern of the past year was the slowdown that occurred not just here in Canada, but in most major economies. Compounding the economic concerns were the 11 September terrorist attacks in the United States.

The Bank of Canada today released its Update to the November Monetary Policy Report, in which it discusses economic and financial trends in the context of Canada's inflation-control strategy.

(English Version) Economic developments in Canada since the November Report, and the profile for growth outlined in the Update, suggest that the amount of slack in the economy through 2002 will likely be somewhat greater than assumed in November.

(Bilingual Version) Economic developments in Canada since the November Report, and the profile for growth outlined in the Update, suggest that the amount of slack in the economy through 2002 will likely be somewhat greater than assumed in November.

The Bank of Canada today announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 2 1/4 per cent.

In the 1970s and 1980s we found - in common with many other countries - that high and variable rates of inflation created a lot of economic damage. And it took a long time and a lot of work with various monetary policy frameworks before we got back on track.