Quote:
Originally Posted by Red
But higher rates are preferred as they are an indication of healthy economy and prosperity (to a point) Generally governments use rates to control inflation.
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Actually, it's the BOC which has no link to the government of Canada. It operates as a seperate entity, as such politics can't influence the BOC's rate decisions.
The BOC's mandate is to keep inflation at its target of 2.2% and interest rates are its main tool for achieving this. So it's not generally used to control inflation, it's what controls inflation.