This is extraordinarily important if we as a nation are to become less vulnerable to external shocks and to prepare for the pressures of a shrinking working-age population. Inflation-control targets and a flexible exchange rate Let me now talk briefly about the role of the inflation-control targets and the floating exchange rate in Canadian monetary policy.
Explicit inflation-control targets were jointly introduced by the Bank and the Government of Canada in 1991. Since 1995, the goal has been to hold the trend of inflation inside a target range of 1 to 3 per cent, with emphasis on the midpoint of 2 per cent. Inflation targets provide an anchor for policy and an anchor for people's inflation expectations.