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Recognizing the importance of maintaining a stable inflation rate, the Bank of Canada introduced inflation control targets in 1991, when inflation was 5.9%. The inflation control targets assist the Bank in determining what monetary policy actions are needed in the short- and medium-term to maintain a relatively stable price environment. One of the most important benefits of inflation targets is their role in focussing expectations of future inflation. This in turn feeds back into the kind of economic decision-making—by individuals, businesses, governments—that tends to reinforce the capacity of the economy for continuing non-inflationary growth...
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