Bank of Canada Governor Tiff Macklem has sent a letter to premiers, warning them about undermining central bank independence
Governor of the Bank of Canada Tiff Macklem listens as Deputy Prime Minister and Minister of Finance Chrystia Freeland speaks during a joint news conference in Ottawa, on Dec. 13, 2021.Lawrence Schembri is a former deputy governor of the Bank of Canada and current senior fellow at the Fraser Institute.While the effects of increased rate hikes are felt by households and firms across Canada, such remarks from politicians compromise the operational independence of the bank.
During this tightening phase, the central bank increased its policy rate from 0.25 per cent to 4.5 per cent in January, 2023, then took a pause for two monetary policy decisions to allow time to assess the impact of the sharp climb in interest rates and the continuing runoff of its holdings of Canadian government bonds. Given the resilience of demand and the persistence of inflation, the bank resumed raising the policy rate in June and it reached 5 per cent in July, 2023.
Of course, the large increase in the bank’s policy rate has contributed, along with rising global interest rates, to higher mortgage and household borrowing rates. This rise has, in turn, made it costlier for Canadians to purchase houses and service their mortgages and other debt . Higher rates also reduce debt-financed business investment.
The most recent renewal in Canada was in 2021, and the joint statement from the central bank and the Trudeau government reaffirmed that the primary objective of monetary policy is to achieve the 2-per-cent inflation target, and that the bank has the operational independence to achieve its mandate. The joint statement also said that achieving the inflation target and promoting maximum sustainable employment is a joint responsibility of the government of Canada and Bank of Canada.
Canada Latest News, Canada Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Bank of Canada's Macklem warned premiers about cenbank's independence- Canadian PressIn a letter to Macklem sent before BoC's rate decision on Sept. 6, the premiers of Ontario, British Columbia, and Newfoundland and Labrador, expressed...
Read more »
Bank of Canada's Macklem warned premiers about cenbank's independence- Canadian PressIn a letter to Macklem sent before BoC's rate decision on Sept. 6, the premiers of Ontario, British Columbia, and Newfoundland and Labrador, expressed...
Read more »
Bank of Canada's Macklem warned premiers about cenbank's independence- Canadian PressExplore stories from Atlantic Canada.
Read more »
Bank of Canada's Macklem warned premiers about cenbank's independence- Canadian PressExplore stories from Atlantic Canada.
Read more »
Bank of Canada's Macklem warned premiers about cenbank's independence- Canadian PressMarket News
Read more »
Canada committing $10M in humanitarian aid for Israel, Gaza as Canadian flights leaveOTTAWA — Prime Minister Justin Trudeau says Canada is giving an initial $10 million in humanitarian assistance for urgent needs in Israel and the Gaza Str
Read more »