Warning against loose monetary policy: Weaker dollar harms consumers and imports

The Bank of Canada's rate cuts have overshot their mark, pushing the loonie into a tailspin that hurts everyday Canadians more than it helps. While lower rates may support borrowing, the resulting weak currency drives up the cost of almost everything imported, from electronics to food, eroding household purchasing power. Small businesses that cannot pass on higher input costs face shrinking margins or closures. Travellers are postponing trips, and cross-border shopping is drying up. The Bank's dovish stance also risks reigniting inflation, as import prices climb, undoing previous gains. With the US economy still robust, Canada is running a risky experiment in divergence. The interest rate gap attracts capital outflows, compounding the dollar's decline. Instead of a gentle depreciation, the loonie is in a disorderly slide that creates uncertainty for long-term investment. A more measured approach, perhaps pausing cuts until inflation risks are clearer, would better balance the needs of consumers, importers, and the broader economy.