The commodity price is surging at a pace faster than expected. The supply shock fuelled by recent japan earthquake and lynria unrest is short-lived. It is the growing demand from dwveloping countries that put upward pressure on the prices. Such price rise might necessitate interest rate hike, said boc chairman mark carney.
The outflow of capital should not be discourage but promoted, he added. All that improves the efficiency of production around the globe. Goverments should refrained themselves from intervention. Mark later defended the case of japan calamity after which the g7 sell yen to stabilize the currency. The incident had adverise implications on the financial stability and we need to take action to avert it.
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