Bank of Canada's Rate Statement contains an interest rate decision, together with a short explanation of the factors influencing the decision. It is published eight times a year and is one of the key events influencing the Canadian dollar quotes.
The interest rate decision is adopted by the BoC Governing Council. The Governing Council makes the decision using information provided by the Monetary Policy Review Committee and the four economic departments at the Bank (they are responsible for analyzing Canada's economic situation, the international economy, financial stability and financial markets). Also the Council uses data series from Statistics Canada.
The decision-making process consists of five stages. First, all the above-mentioned committees and departments present projection on the current situation and the the country's financial system outlook. Major briefing occurs at stage 2, where the information obtained is discussed. Then the Governing Council receives final recommendations on monetary policy from BoC departments, and then starts internal discussions. After that the BoC makes a decision, announces at a press conference and publishes an interest rate report.
Depending on inflationary conditions, the BoC may either raise the interest rate (if inflation is too high), cut it (in case of deflation), or leave it unchanged (if inflation remains at the target level). The interest rate is the main instrument for regulating inflation, which is implemented by the Bank of Canada.
Changes in the interest lead to a short-term volatility of the Canadian dollar. An increase in the interest rate is seen as positive for the national currency.