August 24, 2010 / 4:30 PM / 9 years ago

Bank of Canada mulls change to inflation target

KINGSTON, Ontario, Aug 24 (Reuters) - The Bank of Canada said on Tuesday that changing its 2 percent inflation target could bring economic benefits, but cautioned that such changes must not sacrifice price stability.

The bank has been researching the options of either lowering its inflation target or adopting an alternative price-level target as it prepares to renew an agreement with the government at the end of 2011.

“Shifting to a lower inflation target and/or moving to a price-level target are still possibilities, and in some respects look even more promising than they did before the crisis, although other aspects of our research results and recent experience lend an extra air of caution,” Bank of Canada Deputy Governor John Murray said in a speech to the Canadian Association for Business Economics in Kingston. (Reporting by Ka Yan Ng; editing by Rob Wilson)

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