Canadian deputy governor explains reserves regime
Floating exchange rate, asset-liability matching and liquidity focus do not demand bigger portfolio
The Bank of Canada’s low reserves portfolio is adequate due to a floating exchange rate regime and a focus on asset-liability equilibrium and liquidity, deputy governor Timothy Lane said on February 6.
In a speech at the Peterson Institute in Washington, DC, Lane outlined the Bank of Canada’s reserves management approach and the rationale behind it. “In large measure, the difference between our approach to reserve management and those of other reserve managers is related to the relatively small
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