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Rapid growth in emerging-market economies is driving up demand for commodities, and that has pushed up world prices for oil and many non-energy commodities. Meanwhile, productivity improvements in some countries and a competitive world environment are lowering the prices for some consumer goods, communications services, and computer equipment.

Canada's experience is interesting and potentially insightful for two important reasons. First, Canada has more experience with a flexible exchange rate than almost any other country.

Up to now, world capital markets have been managing these imbalances in a reasonably smooth way. In the short term, it is reasonable to expect that they will continue to do so. But over the medium term, imbalances of this magnitude are not sustainable.

Mr. Dodge cited the promotion of flexible markets, the creation and maintenance of a sound financial system, and the pursuit of sound fiscal and monetary policies as priorities for policy-makers worldwide.

The Bank opened its doors on 11 March 1935, at the height of the Great Depression, and immediately faced enormous challenges. In meeting those challenges, the new Bank of Canada drew on the experience of other, established central banks. It received valuable guidance in functions such as the issuance of bank notes, managing foreign exchange reserves, and promoting financial stability.