Broken trust is hard to restore, but the Bank of Canada (BoC) is trying its best to get back on Canadians’ good side by becoming more transparent about how and why it makes decisions around changing interest rates.
Driving the news: The BoC opened up to the public about its decision-making process, releasing never-before shared information last week.
For the first time, the bank published it’s Summary of Deliberations and Market Participation Survey.
- The Summary of Deliberations is the minutes of the BoC’s governing council meeting where interest rate decisions are officially made—the interesting reveal here is that the council considered keeping rates at 4.25% in January.
- The Market Participation Survey showed that economists and investment strategists disagree with the bank’s economic outlook for 2023 but agree that inflation will hover below 3% by year’s end.
Why it’s happening: Back in 2022, the BoC suggested people should expect interest rates to stay low—but in 2022, it reversed course and began a series of inflation-fighting hikes that put some people (mainly those who’d taken on lots of mortgage debt) in a tough spot.
- The IMF called on Canada’s central bank to work towards greater transparency—the US Federal Reserve and the Bank of England publish memos explaining their decisions around monetary policy.