Bank of Canada ‘remains independent’ amid political comments: Macklem
Bank of Canada governor Tiff Macklem reaffirmed the central bank’s independence on Thursday in response to politicians weighing in on the institution’s interest rate decisions over the past week.
“I am confident that the Bank of Canada remains independent,” Macklem said to reporters in Calgary.
“We have a clear mandate. Canadians expect us to control inflation, and that’s what we’re doing.”
Macklem’s comments came a day after the Bank of Canada opted to hold its benchmark interest rate steady.
Chrystia Freeland, Canada’s deputy prime minister and finance minister, called that decision a “welcome relief” for Canadians feeling the pinch of higher interest rates on their mortgages.
Before the decision, three premiers wrote to the Bank of Canada asking the institution to not raise interest rates any higher to avoid further pain on Canadians.
The Bank of Canada is an independent institution tasked with setting monetary policy for the country; it receives its inflation targeting mandate from the federal government but sets interest rates and otherwise operates autonomously.
Some in the Canadian economic landscape took umbrage with Freeland and the premiers’ comments.
Derek Holt, vice-president and head of Capital Markets Economics at Scotiabank, said in a note on Wednesday that the political commentary was “unhelpful.” He said that Freeland’s statement saying she would work “to ensure that interest rates can come down as soon as possible” was “not the domain of a finance minister.”
Holt argued that such commentary could undermine global opinions of the Canadian financial system if observers started to believe that the central bank was subject to political interference.
Macklem was asked Thursday after a speech to Calgary’s
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