BOC Governor Speaks on Canada’s Inflation

BOC governor Stephen Poloz has cautioned that Canada's inflation rate could rise up to the central bank's 2% target more slowly than on

Arslan Butt•Tuesday, May 26, 2020•1 min read

BOC Governor Speaks on Canada's Inflation

BOC governor Stephen Poloz has cautioned that Canada’s inflation rate could rise up to the central bank’s 2% target more slowly than on average. These latest comments come within a week of Poloz hinting that the BOC could continue with low interest rates in the near future and has no plans yet of increasing them.

During April, Canada’s inflation rate fell into negative territory, on account of the coronavirus pandemic led shutdowns even as crude oil prices crashed. This was the first time since 2009 that Canada’s annual inflation rate had turned negative.

Poloz’s latest comments about inflation were made while he was addressing the University of Alberta, when he also added, “Our policy framework does give us flexibility in the time it takes to get inflation back to target which allows us to make tactical decisions to avoid unintentionally making financial stability concerns worse.”

Ever since the coronavirus pandemic spread around the world, the BOC has cut interest rates thrice and has also rolled out a massive bond purchase program to help prop up the Canadian economy. The current inflation target for the central bank sits between 1% and 3%, but the stimulus measures would make it harder for the government to meet this target in the near future.

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ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.