The Bank of Canada says it is ready to act forcefully to achieve the 2% inflation target

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OTTAWA, March 25 (Reuters) – The Bank of Canada’s primary objective is to bring high inflation back to target and it stands ready to act “forcefully” with rate hikes to do so, particularly as as price pressures intensify, an MP said on Friday.

Sharon Kozicki, in her first speech since joining the Board of Governors last year, also said the pace and extent of interest rate hikes, as well as the onset of quantitative tightening, would be actively discussed at the April central bank meeting.

“Inflation in Canada is too high, labor markets are tight and demand is buoyant,” Kozicki said, speaking via webcast to the Federal Reserve Bank of San Francisco.

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“It is important to be clear that getting inflation back to the 2% target is our main objective and our unwavering commitment. We have taken action and will continue to do so to bring inflation back to the target, and we are ready to act with force,” she said.

The Bank of Canada raised its key rate to 0.5% earlier this month, its first hike in three years. Rates were cut to a record low of 0.25% amid the pandemic. Inflation reached 5.7% in Canada in February and is expected to rise.

(Reporting by Julie Gordon, editing by David Ljunggren)

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