OTTAWA –
Bank of Canada senior deputy governor Carolyn Rogers said addressing supply issues could help ease inflationary pressures but such policies would not replace the need for higher interest rates.
Governor of Canada’s Rogers andBank Tiff Macklem appeared before the Senate banking committee on 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 cool inflation but said the cycle of tightening monetary policy was coming to an end.
“If we don’t do enough, Canadians will continue to suffer from high inflation,” said Macklem.
Officials were asked if the government could play some role in combating high inflation, and in response, Rogers said policies that tackle supply problems would help reduce inflation.
Rogers added that such policies, however, would complement the rate hike, not replace it.
“We need to do our job, other policymakers need to do theirs,” she said.
Last week, the central bank raised interest rates for the sixth time in a row this year, raising the key rate by half a percentage point and suggesting more hikes are on the way.
Canada’s annual inflation rate was 6.9% in September but has been steadily declining since hitting a peak this year of 8.1% in June.
The Bank of Canada also released its latest monetary policy report last week, which showed that the Canadian economy is on track to decelerate significantly towards the end of the year and the first half of 2023.
Bank of Canada officials are often called in to testify after the release of the April and October monetary policy reports.
This Canadian Press report was first published on November 1, 2022.
