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CAD
Grant Lynch
Matt Bennett
Lainie Vi
C A D/US D
0.9
1
1.1
1.2
1.3
1.4
C anada Int. R ate
6/3/2009
5/13/2009
4/22/2009
4/1/2009
3/11/2009
2/18/2009
1/28/2009
1/7/2009
12/17/2008
11/26/2008
11/5/2008
10/15/2008
9/24/2008
9/3/2008
8/13/2008
7/23/2008
7/2/2008
6/11/2008
5/21/2008
4/30/2008
4/9/2008
3/19/2008
2/27/2008
2/6/2008
1/16/2008
12/26/2007
12/5/2007
11/14/2007
10/24/2007
10/3/2007
9/12/2007
8/22/2007
8/1/2007
7/11/2007
6/20/2007
5/30/2007
5/9/2007
4/18/2007
3/28/2007
3/7/2007
2/14/2007
1/24/2007
1/3/2007
C AD E xc hang e R ate & C anadian Interes t R ate
5.00%
4.50%
4.00%
3.50%
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
Axis T itle
0.8
1.1
1.4
5/20/2009
4/22/2009
3/25/2009
2/25/2009
1/28/2009
12/31/2008
12/3/2008
11/5/2008
10/8/2008
9/10/2008
8/13/2008
7/16/2008
6/18/2008
5/21/2008
4/23/2008
3/26/2008
2/27/2008
1/30/2008
1/2/2008
12/5/2007
11/7/2007
10/10/2007
9/12/2007
8/15/2007
7/18/2007
6/20/2007
5/23/2007
4/25/2007
3/28/2007
2/28/2007
1/31/2007
1/3/2007
C AD/US D and Interes t R ate Differenc e (C anda-US A)
2.50%
2.00%
0.9
1.50%
1
1.00%
C AD/US D
0.50%
Difference
1.2
0.00%
-0.50%
1.3
-1.00%
-1.50%
In 2000, the Bank of Canada adopted a system of eight pre-set dates per year on
which it announces its key interest rate
Interest rate announcement
Monetary Policy Report
and Update
20-Jan
22 January (Update)
3-Mar
---
21-Apr
23-Apr
4-Jun
---
21-Jul
23 July (Update)
10-Sep
---
20-Oct
22-Oct
8-Dec
This process includes an economic projection based on a model of the
Canadian economy; an analysis of the information from monetary and credit
aggregates, interest rate credit spreads, and changes in credit access; and
information on the interest rate expectations of participants in financial
markets.
Monetary Policy Reports
Meeting Date
Canadian Monetary Policy Report Update
Interest Rate
1/18/2007
In line with the Bank’s outlook, the current level
of the policy rate is judged, at this time, to
be consistent with achieving the 2 per cent
inflation target over the medium term.
Target rate for the overnight rate
unchanged at 4.25 per cent
on 5 December 2006 and 16
January 2007
5/26/2007
The current level of the target for the
overnight rate is judged, at this time, to be
consistent with achieving the inflation
target over the medium term.
The Bank left its key policy
interest rate unchanged at
4.25 per cent on 6 March and
24 April.
7/12/2007
The Bank judges that the economy is
now operating further above its production
potential than was projected at the time of
the April Report
Bank of Canada raised its key
policy interest rate to 4.5 per
cent on 10 July
Monetary Policy Reports Cont.
Meeting Date
10/18/2007
Canadian Monetary Policy Report Update
Momentum in domestic demand is projected
to remain strong, but net exports will exert
more of a drag due to a weaker US outlook.
Canadian GDP is expected to grow by 2.6%
in 2007, 2.3% in 2008, and 2.5% in 2009.
Core and total inflation are expected to return
to 2% in the second half of 2008.
1/24/2008
Both core and total CPI inflation are projected to fall
below 1.5% in mid 2008 before returning to 2% by
the end of 2009
Effects of the slowing US economy will continue to
add downward pressure on export growth.
Stimulus is needed to aggregate supply and demand
in balance and to return inflation to target over the
medium term
4/24/2008
Slowing global economic growth and ongoing
financial market turbulence will have direct
consequences for the Canadian economy
Both core and CPI inflation are projected to
be slightly below 2% in 2009 and return to 2%
in 2010.
The risks around the Bank’s base-case
project for inflation appear balanced.
Interest Rate
The current level of the target
for the overnight rate is
consistent with achieving the
inflation target over the medium
term.
The Bank projects average
annual growth of 1.8% in 2008
and 2.8 in 2009
GDP is projected to grow by
1.4% in 2008, 2.4% in 2009,and
3.3% in 2010
Monetary Policy Reports Cont.
Meeting Date
Monetary Policy Reports Update
Interest rate
4/15/2008
Canadian GDP is projected to grow
by 1.0 per cent in 2008, 2.3 per cent
in 2009, and 3.3 per cent in 2010.
• Higher energy prices will push total
CPI inflation temporarily above target,
peaking in the first quarter of 2009
current levels of short-term
interest rates incorporate no
change in the target overnight
rate by year-end.
10/23/2008
• Growth in Canada will be sluggish
through the first quarter of next year,
then pick up over the rest of 2009
• Total CPI inflation is projected to fall
below 1 per cent in mid-2009 before
rising to 2 per
cent by the end of 2010. Core
inflation will remain below 2 per cent
The policy rate has been
lowered by a total of 75 basis
points this month, 225 basis
points since the beginning of
December 2007
4/23/2009
Canadian real GDP is projected to
decline by 3.0 per cent in 2009 and to
grow by 2.5 per cent in 2010 and by
4.7 per cent in 2011
After declines in 2009, core inflation
and total CPI inflation are projected to
gradually return to 2 per cent in the
third quarter of 2011
The Bank lowered its policy rate to
¼ percent. conditional on the outlook
for inflation, committed to hold the
rate at that level until the end of the
second quarter of 2010
Projection of Interest Rates for 2010

Canada’s Bank will continue to keep interest rates
low to stimulate the economy.

Net exports has shown less drag on the economy in
2008-2009, and then contributed positive growth.

Stronger global growth, improved credit conditions,
and lagged effects on monetary policy actions show
changes coming soon.