BOC's Stephen Poloz speaking in Ottawa
- Canada will run independent monetary policy in response to economic circumstances
- Flexible exchange rate is the most important way of adjusting to effects of commodity price shocks
- Depreciation of the CAD is a natural part of the process
- CAD decline helps to shift the economy's growth engine away from commodities to non-commodities
- Movements in FX are helping economies to make adjustments that must take place
- If BOC raised rates to prevent CAD depreciation it would slow the entire economy and make the adjustment shock slower and more painful
- It's no coincidence to see CAD at about the level it was in 2003/2004 as oil is about where it was then too
- Inflation expectations are very well anchored in Canada
- BOC has the tools to mitigate any risk to inflation target or financial system
- Core inflation is understating the underlying inflation trend, given impact of lower CAD on imports
The BOC head seems very relaxed about his currency right now. That's probably enough of a green light to see the weakness continue
