inflation targeting


A policy that central banks in Australia, Canada, New Zealand, and other countries use to keep prices within a certain range to target inflation. The target range is determined with a basket of consumer goods price index. The target is reached by providing additional liquidity or reducing lending rates.

Use inflation targeting in a sentence

You may want to see if there is any way that you can make inflation targeting work for your business.

​ Was this Helpful? YES  NO 5 people found this helpful.

Australia's central bank recently lowered rates to make borrowing more available as a result of their quarterly Inflation Targeting. They noticed that housing was starting to slow and becoming less attainable and adjusted to spark growth.

​ Was this Helpful? YES  NO 10 people found this helpful.

The Federal Reserve Board of Governors uses inflation targeting to direct the operations of the Federal Reserve Open Market Committee: when inflation is too much above or below the target rate, the FOMC may buy or sell treasuries, or lower/raise the discount rate.

​ Was this Helpful? YES  NO 9 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
inflation target inflation-adjusted principal