Stephen Poloz, the governor of the Bank of Canada says that he ‘intends to make inflation control the central thrust of the Bank of Canada’s monetary policy’. He also expresses the possible actions of influencing the exchange rate by weakening the Canadian dollars, because he wants to motivate Canadian businesses to export more goods and services and ‘bring the country’s manufacturing exports back up to historical norms.’ Poloz also claims that he has constantly worked closely with business executives to explore opportunities of the international markets, which the Canadian businesses can export to.
Weakening the Canadian dollars is a great way to motivate Canadian businesses to expand their operation scopes to the international market. Because of the possible action of weakening Canadian dollars by the Central Bank, it would be more cost-efficient for foreign countries to import Canadian commodities. The increase in exports will result in the increase of investments and capital flows in the Canadian market. But on the other hand, inflation will affect individuals badly if the Canadian dollars keep weakening. So it is very important for the Central bank to control the inflation rate by making appropriate monetary policies.
Source:
http://www.cbc.ca/news/business/poloz-says-inflation-will-be-focus-of-central-bank-policy-1.1870910
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