$ 84 in oct 2014 to us $ 47 in jan 2015 – and assessment was that prices were likely to stay low for at least a year. • against backdrop of modest economic growth in 2014 continuing into 2015, wage growth was weaker than anticipated and so was pass - through into prices. 24. waiting to adjust policy in apr would have put mas considerably behind curve and led to excessive speculation about a policy move. • we decided to adjust both inflation forecast and policy stance in a timely and consistent manner. 25. in apr, mas affirmed monetary policy stance. • this decision surprised some market observers, who had anticipated a further easing of s $ neer policy. we made no change to policy stance in apr because there was no change to forecasts 26. there was no ground for another shift in policy. • no reason to reduce slope of s $ neer policy band further, given that core inflation was projected to pick up from q4 onwards and economy remained close to potential. • no reason to shift level of policy band, as we did not envisage deflation or recession. • no reason to adjust width of policy band, which remained sufficient to accommodate volatility in foreign exchange markets. in effect, mas front - loaded policy adjustment in jan so that further adjustment was not necessary in apr 27. shift in monetary policy stance in jan was measured : continuing to keep s $ neer band on gradual and modest appreciation path to ensure price stability over medium term. important to keep a medium - term orientation with regard to setting monetary policy 28. if mas reacted to every short - term fluctuation in output and prices, it would risk introducing even more volatility to markets and economy. this is because : • external shocks that could hit small open economy like ours can be very frequent bis central bankers ’ speeches • there are considerable lags in monetary policy transmission. off - cycle policy shift therefore highly atypical and only sparingly used. 29. current policy stance remains appropriate for ensuring medium - term price stability • economy estimated to be close to its potential for 2015. • labour market expected to remain at full employment • core inflation, most relevant indicator for mas ’ monetary policy, expected to strengthen. next monetary policy review is as scheduled in oct. mas ’ financial performance 30. mas ’ p / l was almost in balance in fy2014 / 15, recording a small profit of $ 0. 3 billion. • in fy2013 / 14, we recorded

consumers, business people, savers, and investors. it means that they should be able to go about their affairs confidently, knowing that they can count on their central bank to do whatever is necessary to keep future inflation low, stable, and predictable. in this way, they will be able to make sounder economic decisions, which will lead to better overall economic performance and rising incomes. over the past several years, the canadian economy has experienced low and stable inflation and a strong rate of expansion. moreover, economic activity has been less variable than in the 1970s and 1980s, even though we had to face some important economic shocks, such as the mexican and the asian crises. employment and personal incomes have risen, and business investment in machinery, equipment, and new technology has increased very substantially, particularly since 1996. at the same time, low inflation has encouraged canadian businesses to operate more efficiently and to focus on cost control and productivity improvements. that is quite a change from our experience in the 1970s and 1980s. that experience amply demonstrated what a terrible price the economy and the people pay for high, unstable, and unpredictable inflation. i am thinking here of the increased uncertainty about the future, the distortion of vital signals and information that people rely on to make important decisions, the ups and downs in output and employment, and the waste of valuable economic resources as they are diverted from productive investments to speculative activities. all of this should be enough to strengthen our collective resolve not to let inflation break out again. and it convinces me that the focus of canadian monetary policy since the early 1990s on low and predictable inflation as an essential building block of a productive, well - functioning economy has been exactly right. while low inflation is a necessary condition for good economic performance, it is not sufficient by itself. other factors are also crucial. clearly, it is very important that we all continue to work to improve the structure of our economy and the skills of our labour force, and to ensure that our product and labour markets operate efficiently. it is also critical that over the next decade all levels of government continue to focus on reducing their net indebtedness to lessen canada's vulnerability to external shocks and to prepare for the pressures we will face with the projected decline in our working - age population. canada's monetary policy approach : inflation - control targets and a flexible exchange rate let me now turn to the role of the inflation - control targets and the floating exchange rate in canadian monetary policy. explicit inflation - control targets were jointly