In addition, our inflation-targeting regime provided both a beacon and an anchor as we navigated the global financial crisis. The inflation-targeting agreement is renewed with the federal government approximately every five years. The agreement sets the inflation objective at 2 per cent – the midpoint of a 1 to 3 per cent target range – and gives the Bank effective independence for achieving it.
It was last renewed in 2011. We view these periodic reassessments as an essential element of our commitment to good governance. With the next renewal set for 2016, I want to talk to you today about the key issues that we reviewed in 2011, major developments since then and outstanding questions that we will be analyzing over the next two years.