Bank of Canada to reveal summaries of rate-decision meetings starting next year

The Bank of Canada will begin publishing summaries of what happened at meetings to decide monetary policy starting next year, after a report from the International Monetary Fund suggested some how banks can be more transparent about what they do.

In a new report assessing transparent practices at central banks around the world, the IMF said the Bank of Canada “sets a high standard of transparency.”

The report also made 10 recommendations to improve transparency, including one to “consider publishing a detailed summary of the Executive Council’s monetary policy considerations.”

That is similar to what happens in the United States, where the Federal Reserve periodically publish minutes among their two-day policy meetings weeks after the decision was announced. This is so that the public can better understand the rationale behind rate decisions, including the opinions of those who may disagree with the final decision.

The most recent Fed minutes revealed the specific reason the bank was up 75 points rather than 50 as was widely expected. They also revealed that some members of the bank think another rate hike of 50 to 75 points could happen the next time they meet.

The Federal Reserve also issues what is known as a “dot graph” – a visual representation of interest rate predictions, at various points in the future. The most recent dot chart shows that most policymakers think the Fed rate will rise to close to 5% next year, then there are opinions on how far and quickly it will fall. how.

The so-called ‘dot graph’ from the Federal Reserve shows expectations for bank rates. Each dot represents a Fed member’s prediction of what the rate will be at a given time. The concentration of the dots to the left suggests there is broad consensus that the Fed rates will end this year above 4% and rise to close to 5% next year. (Federal Reserve)

Statements from Canada’s central bank on the date of the rate decision never included such predictions, nor did they hint at how close they were to making a decision different from the one they were in. announced.

Bank welcomes IMF findings

The Bank of Canada said it has committed to publishing such summaries approximately two weeks after each rate decision beginning January 2023.

But unlike what the Fed does, the summaries will not provide attribution to individual board members and will not record votes because there are no votes in the bank’s deliberation process.

In response to the report, the Bank of Canada said it welcomed the findings.

“The bank is committed to continuously improving our transparency,” the bank said in a statement Official statement. “While we regularly evaluate and develop our own operations, including, importantly, through comprehensive reviews of our monetary policy framework every five years, we also feedback from external stakeholders and look at broader trends in the central banking community.”

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