- Bank of Canada’s Carolyn Wilkins Speech Suggests Investments Needed to Keep Canadian Economy Firing
- Coronavirus Fears Decline After Treatment Breakthrough, but WHO Warns It Is No ‘Cure’
Yesterday saw the Bank of Canada’s second-in-command governor Carolyn Wilkins give a speech in which she noted that breaking down interprovincial trade barriers and reforming tax and regulatory systems will keep the country’s economy singing into the future. Before this speech, the Canadian dollar dropped to a two-month low against the greenback, with the global threat of the coronavirus still hot on its tail. However, recent reports from China have suggested that a drug has been identified which may be useful in the treatment of sufferers but the World Health Organisation (WHO) pressed that the threat from the virus is still very real and no therapeutic treatment has been discovered of yet. The boost in optimism surrounding the virus’s slowdown has given CAD something to rally upon as other risk and commodity sensitive currencies also receive a boost.
Yesterday marked BoC governor Carolyn Wilkins’ speech which provided some insight into the Canadian dollars outlook. Within the speech Wilkins noted that breaking down interpvoincial trade barriers and reforming tax and regulatory systems is the way forward in order to keep the country’s economy firing on all cylinders as it moves further into the year. The BoC’s monetary policy tool kit can only take the economy so far, she stated, as she urged the need for economic innovation and investments from a range of actors. She also pointed towards the current era of low neutral interest rates. This is the level at which the monetary policy neither stimulates nor holds back the economy. She indicated that this method leaves central banks with less flexibility to stimulate growth through rate cuts. Wilkins stated that a switch up in policies could “restore some lost manoeuvrability for monetary policy” and keep the global economy on a more level playing field if other countries adopt a similar agenda.
Reports from China this week are indicating towards a breakthrough in treatment for the coronavirus which has shaken the global economy. Researchers at Zhejiang University claim to have found a drug which may be useful in the treatment of sufferers. But the World Health Organisation (WHO) stepped in yesterday to announce that these breakthroughs do not denounce a ‘cure’ and that the threat from the virus is still very real. Market fears eased as the news from China broke which lifted the Canadian dollar, but the threat is still at large. Investors are hoping that the worst is soon to be over as the disease peaks and begins to decline as countries attempt to gain control of the disease.
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