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In this article, the authors identify forward rate agreements, or FRAs, as short-term interest rate guarantee instruments negotiated by two parties, one of which is typically a bank. In outlining the main features of FRAs, the authors contrast them with BAX contracts (futures contracts on bankers' acceptances that are negotiated through the Montreal Exchange). The article then describes how market participants use FRAs to cover short-term interest rate risk. The final section deals with the way the Bank of Canada uses information from the FRA market as an indicator of interest rate expectations. Econometric models used to retrieve information from FRA rates, as well as the underlying assumptions, are discussed in an appendix.

Proceedings of a conference held by the Bank of Canada, May 1998 (proceedings volume, available in electronic format only)

My colleagues and I look forward to our yearly appearance before your committee because it gives us an opportunity to present an account of how the Bank has worked to fulfil its objectives over the past year. It is also an opportunity for a discussion with you on a range of economic and monetary issues. […]

A second discussion paper outlining proposed changes in the rules for, and the surveillance of, auctions of Government of Canada securities was released for public comment today by the Bank of Canada.

Professor David Laidler of the University of Western Ontario has been chosen to fill the newly-created visiting economist position of Special Adviser in the Bank of Canada for a one-year term beginning in August 1998.

It can take anywhere from one to two years for monetary actions to have their full effect on the economy. Because of this, the conduct of monetary policy must be based on a view of what the economy will be like - not tomorrow, not in a month - but rather in one to two years' time.

The Bank of Canada today released a joint statement of the Government of Canada and the Bank of Canada on the extension of the inflation-control targets.

A year ago, in early 1997, prospects for global economic growth were very promising. World economic activity had strengthened and was expected to accelerate further, with the benefit of low inflation, reduced fiscal imbalances, and stable or declining interest rates. In Canada too, output and employment growth had picked up.

The Bank of Canada today raised its Bank Rate by ½ of one percentage point to 5 per cent.

With inflation remaining low for the sixth consecutive year, the Canadian economy recorded a strong expansion of about 4 per cent through 1997.