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.
The Bank of Canada said in a release announcing the renewal of its five-year mandate today that its inflation target has served Canadians well in recent decades.
The central bank will continue to set monetary policy to make sure annual inflation dips neither too far below or above two percent, but it retains flexibility to respond to economic shocks….