Canada's Deputy Governor of the Bank, Ryes Mendez, stated that monetary policymakers are focused on keeping inflation at the set target of 2%, emphasizing his rejection of calls for actions that could lead to an economic contraction or excessively lower prices of goods and services.

He explained that the bank aims for economic stability and long-term inflation control without negatively impacting economic growth.

Mendez confirmed that further rate cuts may be possible if the economy continues to develop according to current expectations, stressing that the timing of any future cuts depends on incoming data.

In his statements, Mendez noted that the bank no longer needs a restrictive monetary policy as it used to.

He discussed the importance of key economic indicators, such as third-quarter GDP data and November employment reports, in shaping upcoming monetary policy decisions.

In his first speech after assuming the position of Deputy Governor, Mendez defended previous tight monetary policies, considering that raising interest rates was necessary to curb excessive demand during periods of supply chain disruptions.

He confirmed that the bank will carefully consider economic and political developments before making any future decisions, aiming to support market stability and address potential challenges.

Mendez also mentioned that the rate hike campaign was partially effective due to the priority the bank gave to targeting the inflation rate.

He clarified that long-term inflation expectations have not seen significant increases, which helped stabilize conditions during periods of economic turmoil.

He anticipated that inflation would gradually decrease to return to the targeted level, indicating that achieving much lower inflation rates could negatively impact citizens.

He added that the bank works to ensure that the inflation rate remains at the specified percentage, noting that adapting to new conditions might cause some to not notice the direct impact of declining inflation.

It is worth mentioning that the central bank cut interest rates by half a percentage point in October, bringing the rate to 3.75% after a series of cuts that began in June, when the rate had reached 5%.