(Ottawa) Bank of Canada lieutenant governor Carolyn Rogers says addressing supply issues could help ease inflationary pressures, but such policies will not replace the need for higher interest rates.
Posted at 10:07 p.m
Mme Rogers and Bank of Canada Gov. Tiff Macklem appeared before the Senate Banking Committee Tuesday night and answered questions from senators about the bank’s monetary policy and the state of the economy.
In his opening remarks, Mr Macklem reiterated the need for higher interest rates to calm inflation but said the end of the monetary tightening cycle was nearing.
If we don’t do enough, Canadians will continue to struggle with high inflation.
Tiff Macklem, Governor of the Bank of Canada
Officials were asked if the government could play a role in tackling high inflation, and Mme Rogers said policies that address supply issues would help reduce inflation.
Mme Rogers added that such a policy would complement rate hikes, not replace them.
“We have to do our job, the other decision-makers have to do their job,” she said.
Six climbs
Last week, the central bank hiked interest rates for the sixth straight session this year, raising its benchmark interest rate by half a percentage point and signaling rates are likely to rise further.
Canada’s annual inflation rate was 6.9% in September, but has been falling steadily since it peaked this year at 8.1% in June.
The Bank of Canada also released its monetary policy report last week, which suggests the Canadian economy is poised for a significant slowdown towards the end of the year and into the first half of 2023.
Bank of Canada officials are usually called to testify following the release of April and October monetary policy reports.
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