OTTAWA –
Bank of Canada senior deputy governor Carolyn Rogers says addressing supply issues might assist ease inflationary pressures however such insurance policies would not substitute the necessity for greater rates of interest.
Rogers andBank of Canada governor Tiff Macklem appeared earlier than the Senate banking committee Tuesday night and responded to questions from senators in regards to the financial institution’s financial coverage and the state of the economic system.
In his opening remarks, Macklem reiterated the necessity for greater rates of interest to chill inflation however mentioned the top of the financial coverage tightening cycle was drawing nearer to an finish.
“If we do not do sufficient, Canadians will proceed to endure the hardship of excessive inflation,” Macklem mentioned.
The officers have been requested whether or not the federal government might play a job in combating excessive inflation, and in response, Rogers mentioned insurance policies that tackle supply issues would assist cut back inflation.
Rogers added that such insurance policies, nevertheless, could be complementary to curiosity rate hikes and not substitutes.
“We have to do our job, different policymakers have to do their job,” she mentioned.
Last week, the central financial institution raised rates of interest for the sixth consecutive time this yr, elevating its key curiosity rate by half a proportion level and indicating charges must rise additional.
Canada’s annual inflation rate was 6.9 per cent in September however has been steadily declining since reaching its highest rate this yr of 8.1 per cent in June.
The Bank of Canada additionally launched its newest financial coverage report final week, which advised the Canadian economic system is headed for a major slowdown towards the top of the yr and into the primary half of 2023.
Bank of Canada officers are sometimes known as in to testify following the discharge of the April and October financial coverage experiences.
This report by The Canadian Press was first revealed Nov. 1, 2022.