Today saw the September update of the Bank of Canada’s Canadian dollar effective exchange rate index (CERI), and of its monthly series for individual exchange rates. The CERI showed a 2.4% monthly increase, partly due to the September increase in the overnight rate, and a 7.3% increase from June, due also to the July rate increase. The loonie rose against the US greenback by 2.8% in September and against all other major currencies with the exception of the pound sterling, where there was a 0.4% drop. As the impact of this hike works its way through the economy it is bound to dampen consumer price inflation, which was already running much below the BoC’s 2% target rate, at 1.4%, in August. It shows just how delusional is the BoC’s argument that the September rate hike was a necessary preventive action to keep inflation from soaring above the target rate.