BOC Governor Speaks on Canada’s Inflation
Arslan Butt • 1 min read
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.