US Federal Reserve

Since early 2019, the Federal Reserve has been assessing options for achieving the target level of high employment and price stabilization. At the same time, many business leaders do not consider inflation a major challenge. In June 2019, Federal Reserve Chairman Jerome Powell discussed the advantages and disadvantages of the so-called “compensatory strategy” which means that inflation might sometimes overshoot the target of 2 percent. This is expected to help compensate for previous shortcomings. Major US banks expect the Fed to review the inflation target in the first half of 2020.  

European Central Bank (ECB)

At present, ECB officials are ready to revise their inflation targets. Experts are concerned about whether the current target of consumer inflation at 2 percent is suitable for the post-crisis era. ECB President Mario Draghi adheres to a “symmetric” approach when the cost-level flexibility should be either higher or lower than the target of 2 percent. This will allow the regulator to revive inflation after temporary easing, thus sustaining steady price growth. Experts said that changing the very target would require a formal review.

Bank of England

Experts from the Bank of England believe that both the internal policy of the regulator and the general strategy of the G7 countries should be reviewed. This will become particularly relevant if the Labour party wins the vote, analysts emphasize. Some policymakers think that the Bank of England should publish a forecast of the potential interest rate movements necessary to maintain inflation at a target level of 2 percent.

Central Bank of Hungary

Over the past years, the inflation target in Hungary has been held at 3 percent. Thus, the regulator allows inflation to deviate 1 percent up or down from the target level of 2 percent. Fluctuations in inflation can move to both 1 percent and 3 percent without damage to the economy. According to analysts, that would make it possible to avoid changing rates if consumer price trends are unstable. In December 2018, the central bank announced its decision to focus on core inflation, which better reflected trends in consumer inflation.

Reserve Bank of New Zealand

In April 2019, the regulator of New Zealand officially adopted a dual mandate to increase employment and achieve price stability. In this context, the Reserve Bank reduced interest rates to a record low of 1.5 percent. Experts consider that both of these goals are hard to achieve due to the slowdown in economic growth. According to Adrian Orr, the Governor of the Reserve Bank of New Zealand, a further rate cut could follow since inflation is below the target level of 2 percent. Economists believe that the regulator will lower its rate to 1.25 percent in August 2019.

Central bank of Brazil

Twenty years ago, Arminio Fraga, the former president of the Central Bank of Brazil, launched the mechanism of inflation targets. At present, along with other policymakers, he advocates for the overhaul of the system. Experts are of the view that the regulator must monitor the uniformity of economic cycles in order to reduce fluctuations. This would ensure price stability, analysts say.

Central Bank of Thailand

The Central Bank of Thailand expressed its readiness to narrow the inflation target range from 1 percent to 4 percent. The new target level will come into force not until next year. Specialists must take into account a number of factors, including further rates of economic growth. However, they do not rule out a decline in GDP.

Bank of Ghana

In January 2019, Governor of the Central Bank of Ghana Ernest Addison surprised the market with a huge interest rate cut. He is also ready to change the current strategy in order to achieve a lower inflation target. According to Addison, this will enhance the competitiveness of the national economy. In 2007, the Central Bank of Ghana became the second in Africa to launch the inflation targeting process. Since 2013, the regulator has been working hard to push inflation in the range from 6 percent to 10 percent. In April 2019, the country's inflation reached its six-month highest level of 9.5 percent due to the decline in the value of the national currency, the cedi.

South African Reserve Bank

In 2018, the South African regulator said it approved inflation close to the average of 4.5 percent, rather than to the upper border of 6 percent. Now the South African Reserve Bank intends to change the inflation rate, which runs counter to the target of 2 percent. Lesetja Kganyago, the head of the regulator, believes that the current target may be even lower. According to him, the previous decision on the target range from 3 percent to 6 percent is unjustified. However, the desire to keep inflation near the level of 4.5 percent may trigger a conflict between the central bank, policymakers, and the governing party.

Bank of Canada

In 2016, the Canadian regulator adopted the broadest inflation target among the G7 countries. The central bank of the country seeks to maintain an annual increase in consumer prices in the range from 1 percent to 3 percent. The current standard still remains unchanged, however, there have been some innovations in the monetary policy of the central bank. They include three new indicators of core inflation. The mandate of the Bank of Canada will be extended in 2021.