Exchange rates

• Foreign exchange risk premiums and global currency factors

  Staff Analytical Note 2024-20 Ingomar Krohn, Mariel Yacolca Maguiña

  Global currency risk factors continue to explain a large share of the variation in the Canadian dollar during the period following the 2008–09 global financial crisis. We show that they are also systematically important for risk premiums, and only in recent months has the role of idiosyncratic country-specific risks grown.

  Content Type(s): Staff research, Staff analytical notes Topic(s): Asset pricing, Exchange rates, International financial markets JEL Code(s): F, F3, F31, G, G1, G12
• July 9, 2024

  What drives up the price of groceries

  

  Weather, energy prices, and labour and import costs all contribute to higher grocery prices

  Content Type(s): Publications, The Economy, Plain and Simple Topic(s): Exchange rates, Inflation and prices, Inflation targets, Labour markets
• June 19, 2024

  What you pay for at the pump

  

  Kun Mo

  Several factors help set gasoline prices: the costs of crude oil, refining, transporting, retailing and marketing gas, as well as taxes.

  Content Type(s): Publications, The Economy, Plain and Simple Topic(s): Exchange rates, Inflation and prices, Market structure and pricing

• International Economic Sanctions and Third-Country Effects

  Staff Working Paper 2023-46 Fabio Ghironi, Daisoon Kim, Galip Kemal Ozhan

  We study the transmission and third-country effects of international sanctions. A sanctioned country’s losses are mitigated, and the sanctioning country’s losses amplified, if a third country does not join the sanctions, but the third country benefits from not joining.

  Content Type(s): Staff research, Staff working papers Topic(s): Economic models, Exchange rates, International topics JEL Code(s): F, F3, F31, F4, F41, F42, F5, F51

• A Behavioral New Keynesian Model of a Small Open Economy Under Limited Foresight

  Staff Working Paper 2023-44 Seunghoon Na, Yinxi Xie

  This paper studies exchange rate dynamics by incorporating bounded rationality, that is, limited foresight, in a small open-economy model. This behavior of limited foresight helps explain several observations and puzzles in the data of exchange rate movements.

  Content Type(s): Staff research, Staff working papers Topic(s): Business fluctuations and cycles, Exchange rates, International topics, Monetary policy transmission JEL Code(s): E, E4, E43, E7, E70, F, F3, F31, F4, F41
• February 16, 2023

  Our commitment to 2% inflation

  Speech summary Paul Beaudry Alberta School of Business Edmonton, Alberta

  Deputy Governor Paul Beaudry explains why the 2% target remains the centrepiece of the Bank of Canada’s inflation-targeting framework.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Exchange rates, Inflation targets
• February 16, 2023

  No two ways about it: Why the Bank is committed to getting back to 2%

  Remarks Paul Beaudry Alberta School of Business Edmonton, Alberta

  Deputy Governor Paul Beaudry discusses the benefits of being near the Bank’s 2% inflation target and the dangers of straying from it for too long.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Exchange rates, Inflation targets
• February 7, 2023

  Monetary policy at work

  Remarks Tiff Macklem CFA Québec Québec, Québec

  Bank of Canada Governor Tiff Macklem explains how recent interest rate increases work their way through the Canadian economy to slow demand and bring inflation down.

  Content Type(s): Press, Speeches and appearances, Remarks Topic(s): Domestic demand and components, Exchange rates, Inflation and prices, Interest rates, Monetary policy, Monetary policy transmission, Recent economic and financial developments
• February 7, 2023

  Higher interest rates are working

  Speech summary Tiff Macklem CFA Québec Québec, Québec

  Governor Tiff Macklem explains how the Bank of Canada’s increases to the policy interest rate will cool the economy and bring inflation down.

  Content Type(s): Press, Speeches and appearances, Speech summaries Topic(s): Domestic demand and components, Exchange rates, Inflation and prices, Interest rates, Monetary policy, Monetary policy transmission, Recent economic and financial developments

• Stress Relief? Funding Structures and Resilience to the Covid Shock

  Staff Working Paper 2023-7 Kristin Forbes, Christian Friedrich, Dennis Reinhardt

  Funding structures affected the amount of financial stress different countries and sectors experienced during the spread of COVID-19 in early 2020. Policy responses targeting specific vulnerabilities were more effective at mitigating this stress than those supporting banks or the economy more broadly.

  Content Type(s): Staff research, Staff working papers Topic(s): Coronavirus disease (COVID-19), Exchange rates, Financial institutions, Financial stability, Financial system regulation and policies, International topics JEL Code(s): E, E4, E44, E6, E65, F, F3, F31, F36, F4, F42, G, G1, G18, G2, G23, G3, G38