Monetary Policy Report

The monetary policy instrument Monitoring infl ation The Bank carries out monetary policy through changes In the short run, the prices of certain CPI components in the target for the overnight rate of interest.2 These can be particularly volatile. [...] Part of this increase reflects the agreement between the Organization of the Petroleum Exporting Countries (OPEC) and other oil producers to cut output to hasten the rebalancing in the oil market. [...] The Chinese authorities recently announced adjustments to the basket of currencies used to assess the value of the renminbi, reducing the weights of major advanced economy currencies and adding new currencies. [...] Moreover, the weight of the rest of the world ness and residential investment and consumption) as well triples, better refl ecting the diversifi cation of trade outside as to GDP growth in the rest of the world. [...] Other factorsb (right scale) a. Also includes the effect on infl ation of the divergence from the typical relationship between gasoline and crude oil prices, the introduction of the cap-and-trade plan in Ontario and the Alberta carbon levy b. From 2016Q4 to 2017Q3, other factors mostly represent the expected impact of below-average infl ation in food products.