The Financial Post reports in its Tuesday edition that the Bank of Canada's decision to bring back a cash-management tool that it has not used in years suggests policy-makers do not want to start loosening monetary policy soon, says Bank of Nova Scotia economist Derek Holt. A Bloomberg dispatch to the Post reports that the BOC said Friday it will soon restart auctions of Canadian government cash balances, something it has not done since August, 2020. Some strategists see that as another move to inject liquidity into short-term funding markets -- which may buy the BOC more time to continue its quantitative tightening program. Mr. Holt says the announcement "could indirectly serve as a signal that they are more hawkishly inclined than markets are pricing." He adds, "Doubling down on QT while relying upon a complex patchwork of funding tools like repo injections and this latest step could be an implicit signal they are nowhere close to easing -- if not inclined to tighten further." The BOC began quantitative tightening in April, 2022, ending its purchases of government bonds and allowing its balance sheet to shrink as existing bond holdings mature without replacement. The process removes liquidity from the system.