While messaging from the bankofcanada has generally been comprehensive and understandable, the IMF found 'room for greater transparency.' economy cdnpoli interestrates
Published:Those pondering the inner workings of monetary policy at the Bank of Canada — namely why they continue to aggressively hike interest rates — may soon have some clarity. The central bank has agreed to be more forthcoming about its council’s decision making process, and will start to publish a summary of deliberations two weeks after each rate policy rate announcement, as of January 2023.
The new communication comes as a response to a report from the International Monetary Fund on central bank transparency, whichNearly Half of Canadians Putting Homebuying Plans On Hold Due to Rate Hikes The IMF found that while messaging from the Bank of Canada has been generally comprehensive and understandable — in fact noting that it has been one of the “pioneers” in setting the standards for monetary policy communications — “There is room for greater transparency with respect to the policy deliberations.”
“Given the dynamic notion of transparency and heightened economic uncertainty, the BOC could strengthen its relations with its stakeholders by providing more information on monetary policy deliberations and ex-post policy evaluations,” states the IMF’s report. “Moreover, following the recent modification of the BOC’s mandate to consider the broader labor market, the role of comprehensive and coherent communication on the BOC’s core objectives is becoming even more important.
“We know that by being transparent, we can help all Canadians understand what we are doing and why, and that’s essential for their trust,” said BoC Governor Tiff Macklem. “This is always important, and especially crucial as we work to bring inflation back to the 2% target.”glimpses of its rationale in the language used in interest rate announcements, speaking generally to the economic factors driving its governing council’s decisions.
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