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Canada's approach to monetary policy

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  • Jane Sneddon Little

Abstract

The ultimate goal of Canadian monetary policy is maintaining a low, stable rate of inflation in order to foster efficient economic performance and a rising standard of living for Canadians. More specifically, the Bank of Canada aims to keep inflation inside a target range of 1 to 3 percent. This range, established jointly with the federal government, was first announced in 1991 and has been extended through the end of 2006. Over the medium term, the target applies to total CPI. The Bank also uses a core CPI measure as a guide to future inflation developments over the shorter term. The Bank of Canada's operational target is the overnight rate, which is set at the midpoint of a 50 basis point operating band.

Suggested Citation

  • Jane Sneddon Little, 2002. "Canada's approach to monetary policy," New England Economic Review, Federal Reserve Bank of Boston, issue Q 2, pages 19-23.
    • Handle: RePEc:fip:fedbne:y:2002:i:q2:p:19-23
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    File URL: http://www.bostonfed.org/economic/neer/neer2002/neer202d.pdf
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    References listed on IDEAS

    as
    1. Bank for International Settlements, 1999. "Implications of repo markets for central banks," CGFS Papers, Bank for International Settlements, number 10, October –.
    2. James Dingle, 1998. "The LVTS-Canada's large-value transfer system," Bank of Canada Review, Bank of Canada, vol. 1998(Autumn), pages 39-55.
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