MNI: Central Bank Autonomy Vital Amid Tough Recent Hikes-BOC
MNI (OTTAWA) - Independent monetary policy has become more important through recent steep rate hikes according to Deputy Governor Nicolas Vincent of the Bank of Canada, an institution whose Governor is being threatened with removal.
The regional outreach speech in Sherbrooke, Quebec, didn’t lay out the prospects of a fourth straight cut from the highest borrowing costs since 2001. Remarks about the Bank’s preparations ahead of rate decisions said officials took extra time to assess last year when opting to restart hikes after indicating a pause.
“The independence of a central bank is even more important when difficult decisions must be made, as has been the case in recent years,” he said. “This protects the Bank from short-term political objectives and pressures from special-interest groups.”
Conservative Leader Pierre Poilievre says he will fire Governor Tiff Macklem if he wins the next election, saying the Bank fueled inflation and aided reckless deficits. The Bank is reviewing pandemic-era policies including its first-ever use of QE and the cycle of rates down to near zero then up to 5%. (See: MNI INTERVIEW: Undershoot Risk Drives BOC Cuts- Ex Adviser)