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UPDATE 1-Bank of Canada head says inflation target still 'live issue'

Published 2016-04-19, 01:16 p/m
© Reuters. UPDATE 1-Bank of Canada head says inflation target still 'live issue'

(Adds details on inflation target)
OTTAWA, April 19 (Reuters) - The Bank of Canada is looking
closely at what level of inflation it should aim for as it
prepares for talks with the government about renewing its
mandate, but the bar to change is still high, Governor Stephen
Poloz said on Tuesday.
The central bank reviews its inflation targets, which are
set jointly with the Canadian government, every five years. The
current target is 2 percent, the middle of a 1 to 3 percent
range.
Poloz reiterated during testimony in front of a
parliamentary finance committee that while the threshold for
change is high because the inflation target framework is seen to
have worked well, it is still a "live issue".
The bank is also looking at what is the right measure of
inflation and how to integrate issues of financial stability, he
said.
It was Poloz's first comments since last week's interest
rate decision. The bank left rates at 0.5 percent, though it
flagged the downside risks the economy faces.
Touching on the economy, Poloz said recent data in Canada
have been encouraging on balance but also quite variable.
Poloz also said the central bank had not yet seen concrete
evidence of higher investment and strong creation of firms.

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