OTTAWA — The Bank of Canada is turning to the public for input on its inflation-rate target that underlies any changes to the central bank’s trend-setting interest rate.
The bank had already planned on a much broader consultation than what it did for previous reviews long before the COVID-19 pandemic struck Canada and forced a sharp decline in the national economy.
The crisis has increased the importance of a wider review, since spending patterns dramatically changed and led to a disconnect at times between official measures showing price declines and consumers experiencing higher costs.
The online survey aims to provide a more accurate snapshot of this effect, and seeks ideas on approaches the central bank could take as it tries to keep prices stable.
The comfort zone the bank sets for its inflation target will help determine what happens to its key policy interest rate, which can affect the rates charged for mortgages and loans.
The bank intends to publish a report in the coming months on what it heard in consultations before renewing its inflation-control agreement with the federal government in 2021.