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Bank of Canada: Inflation still too high, but heading in the right direction

Julie Gordon and David Ljunggren

OTTAWA (Reuters) – The Bank of Canada said on Tuesday that inflation remains “too high” ”, despite data showing that price pressures are easing from peak levels, and

Lieutenant Governor Paul Beaudry speaking to college students in Waterloo, Ontario, although some believe a recession may be needed, the central bank believes, By clearly communicating its intent, it reduces the risk of a hard landing.

“In August, inflation was 7 percent. While we’re heading in the right direction, it’s still too high,” Baudry said in prepared remarks ahead of his speech.

“We will continue to do whatever is necessary to restore price stability to households and businesses and maintain Canadians’ confidence in our ability to achieve our mission of returning inflation to 2 per cent,” he later said. Replenish.

Inflation slowed again in August but remained at 7.0%, well above target. The three core inflation measures taken together, seen as a better indicator of underlying price pressures, also eased slightly.

Beaudry said the best way to deal with high inflation is to ensure Canadians understand and trust that the central bank can control prices, which will keep expectations stable. To do this, banks must be clear in their messages, he said. Risk of hard landing.

Bank of Canada raised its policy rate by 300 basis points in just six months, earlier this month Some time to signal that it’s not done. Currency markets bet on October will again 50-bp rise to 3.75% .

CAD/USD fell 0.8% to 1.3360, or 74.3360 cents.

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