Central Bank of Canada (BOC) Governor Tiff Macklem said he remained committed to the central bank’s 2% inflation target, despite expectations that price pressures would rise higher.
Macklem, in testimony before parliament on Tuesday, convinced Canadians to control inflation and also mentioned the central bank’s long history of having previously achieved that objective.
Yet, at the same time, Macklem also said that a full recovery will take time to achieve and it will continue to put pressure on price increases.
The statement came after the BOC released a new central bank forecast showing inflation would rise above the 2% target at a central bank policy meeting last week.
In the latest forecast, the central bank expects inflation to rise above target, and fall back to 2% in the second half of this year, before declining again in the first half of 2022, and further to around 2% in the second half of next year.
Moreover, last week as well, Macklem also allowed inflation above target and said the central bank would not raise interest rates until the economy fully recovers from Covid-19.
The Canadian dollar remained strong around a one -month high against the U.S. dollar, still supported by hawkish decisions from the BOC that had begun reducing government bond purchases last week.
