To achieve this goal, we need a clear, effective policy framework, one that gives Canadians confidence in the value of their money and contributes to strong economic performance and a sound financial system. The two key components of our monetary policy framework are an inflation target and a floating exchange rate.
These components work hand in hand, and indeed reinforce each other, to facilitate adjustment to economic developments. Let me elaborate. To achieve the inflation target of 2 per cent, the Bank aims to maintain a balance between the aggregate demand for and supply of goods and services.