Bank of Canada to weigh up alternatives to inflation targeting

capital framework

The Bank of Canada will conduct a “full horse race” to assess inflation targeting alternatives and related policy toolkits, ahead of its 2021 monetary framework renewal.

The experience gained since the financial crisis shows the central bank’s inflation targeting framework “is not perfect”, deputy governor Carolyn Wilkins said during a speech on November 20.

The key challenge the current framework faces is that the central bank estimates the neutral interest rate to be around 2.5% to 3.5%

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