Monetary Conditions Index - MCI

AAA

DEFINITION of 'Monetary Conditions Index - MCI'

A measure of monetary conditions in the Canadian economy, giving an idea of the relative ease or tightness of monetary policy. MCI gauges the effect that Canada's monetary policy has on the Canadian economy through changes in the exchange rate and interest rates.

INVESTOPEDIA EXPLAINS 'Monetary Conditions Index - MCI'

The index looks at interest rates in Canada and the exchange rate Canada has relative to its major trading partners to give an idea of how these factors are working together to influence the economy. It is calculated as the change in the 90-day commercial paper rate since 1987 plus one third of the percentage change in the exchange rate of the Canadian dollar against the currencies of six of Canada's major trading partners (U.S., EU, Japan, U.K., Switzerland and Sweden), each with a different weighting.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Index

    A statistical measure of change in an economy or a securities ...
  3. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, ...
  4. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  5. Monetary Policy

    The actions of a central bank, currency board or other regulatory ...
  6. Economy

    The large set of inter-related economic production and consumption ...
RELATED FAQS
  1. How does the government influence the securities market?

    Governments generally say they don't like to take an active role in the securities market (except for regulating it); however, ... Read Full Answer >>
Related Articles
  1. Economics

    What Is Fiscal Policy?

    Learn how governments adjust taxes and spending to moderate the economy.
  2. Personal Finance

    How The U.S. Government Formulates Monetary Policy

    Learn about the tools the Fed uses to influence interest rates and general economic conditions.
  3. Personal Finance

    What Are Central Banks?

    They print money, they control inflation, and much, much more. All you need to know about central banks is here.
  4. Investing Basics

    Interest Rates And Your Bond Investments

    By understanding the factors that influence interest rates, you can learn to anticipate their movement and profit from it.
  5. Economics

    What's The Impact On Equities If The Rates Hike?

    The Fed is on course for raising interest rates. True, that leaves the question of when (most likely June or September, but could be later) and how much.
  6. Bonds & Fixed Income

    Why Didn't Quantitative Easing Lead To Hyperinflation?

    Hyperinflation is an exponential rise in prices and tends to occur not when countries print too much money, but is instead associated with a collapse in the real underlying economy.
  7. Investing

    What Has Been Groupon’s Growth Strategy?

    Groupon established a strategy with efforts to become a broader force in the e-commerce world and to expand more strongly into international markets.
  8. Investing

    Are You Ready To Invest In The Tech Sector?

    Tech stocks, particularly those of mature tech companies, are well positioned and offer meaningful upside potential in the near-term.
  9. Investing

    Strategies To Position Your Bond Portfolio

    Fixed income investors may not be able to see them all right now, but important trends are stirring on the investment horizon.
  10. Economics

    The Impact Of Ending The US Embargo On Cuba

    Many argue that ending the US embargo on Cuba will not only make US consumers happy, but also help the US economy and bring more freedoms to Cuba.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center