Canadian Senate calls for Bank of Canada to be more transparent

(Corrects to remove repeated quote in paragraph 6)

(Reuters) – A Senate committee on Wednesday called for greater parliamentary oversight of the Bank of Canada and more transparency from the central bank as it battles to restore credibility lost during last year’s fight to contain inflation.

The Bank of Canada has come under a rare attack from critics, including opposition Conservative leader Pierre Poilievre, for misjudging inflation, which led to renewed calls for it to release minutes and be more open about its decision-making process.

Last week, Bank of Canada finally released minutes from the policy-setting meeting and concluded that the central bank hiked rates last month rather than leaving them unchanged because of labor market tightness and stronger-than-expected growth.

“The Bank of Canada should be more transparent and periodically make public its assessment of the effect of its interventions on inflation and on the evolution of key economic indicators,” the Senate committee on banking, commerce and the economy said.

In a report published on Wednesday, the Senate committee said the tightening of monetary policy was justified, while noting that rising interest rates had begun to slow economic growth and could worsen housing issues.

The central bank declined to comment on the Senate committee report.

On Jan. 25, the Bank of Canada hiked its key interest rate to 4.5%, the highest level in 15 years, and became the first major central bank to say it would likely hold off on further increases for now. (This story has been refiled to remove a repeated quote in paragraph 6)

(Reporting by Urvi Dugar in Bengaluru; Additional reporting by Akriti Sharma; Editing by Simon Cameron-Moore)