Bank of Canada Keeps 2% Inflation Target in Mandate Renewal
The Bank of Canada and federal government have agreed to keep a target of two percent inflation at the core of the central bank’s mandate. The Bank of Canada sets its benchmark interest rate independently from the federal government but it gets its inflation-targetting mandate from Ottawa. In a release announcing the renewal of its […]
TL;DR
- The Bank of Canada and the federal government will continue with a 2% inflation target.
- The central bank's inflation-targeting mandate comes from Ottawa.
- The Bank of Canada independently sets its benchmark interest rate.
- The 2% inflation target has been in place for decades and is considered beneficial.
- The target has guided interest rate decisions to manage inflation during the pandemic recovery.
- The bank raises its policy rate to counter inflation and lowers it to stimulate economic growth.