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Carney defends ‘flexible’ inflation target

Globe and Mail – Feb 24, 2012

The Bank of Canada’s loose approach to meeting its 2-per-cent inflation target is helping it adapt to changing circumstances and may allow it to use interest-rate moves to counter credit imbalances that threaten the economy, Governor Mark Carney said.

“In today’s reality, the hurdles are significant,” Mark Carney said in a speech to the U.S. Monetary Policy Forum in New York.

“For example, in Europe, sustained and necessary structural reforms may, for a time, actually depress nominal growth. The repair of U.S. household balance sheets has yet to fully run its course. Japan’s adjustment remains a work in progress,” he said.