Bank of Canada should consider better communication of monetary policy: IMF

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In response, the BoC said in a statement that “while the Bank may not agree on every suggestion made by IMF staff, we certainly share the goal of transparency, and a commitment to look at ways for possible improvements.” It did not elaborate.

From early last year, the Bank of Canada took a historic step towards transparency by agreeing to release minutes from its policy-setting meeting in efforts to restore credibility lost during its fight to contain inflation.

During the COVID pandemic, the bank was widely criticized for maintaining inflation was temporary and refraining from rate hikes even as consumer prices jumped.

The BoC became the first central bank amongst the G7 countries last week when it trimmed its key overnight rate by 25 basis points to 4.75% as inflation has consistently stayed below 3% since the start of the year.

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The IMF said steps to strengthen communication “could help markets better understand how the BoC reacts to new data.”

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