Bank of Canada Monetary Policy Report Highlights
+ The Canadian dollar will stay at parity.
+ Inflation is expected to reach 2% and “remain well anchored”.
+ Cdn exporters will battle a strong currency.
+ Our ongoing economic recovery will rely more on exports and business investment and less on “US consumer spending, housing, and government stimulus”.
+ In the US, we are becoming less competitive and losing market share to Mexico, China and other countries because of our poor productivity and strong dollar.
+ The US economy is expected to expand by 3.3% vs 2.3% in the previous forecast. Canada is expected to grow 2.4% vs 2.3%.
+ Germany’s finance ministry is working on a contingency plan in case Greece defaults or needs to restructure its debt.
+ Turkish central bank is proceeding with an “experimental” policy to weaken its currency. Interest rates were reduced by 0.25%.
+ China will allow direct trading of their yuan against the Australian and Singaporean dollars, adding to Russia and Malaysia, as they strive to reduce the role of the US dollar in trade.
+ Indian power developers are seeking financing from China to fuel expansion as interest rates soar. They need to fund about $45 billion of equipment from China by 2017.