Carney: BOE Targets Inflation, Not Exchange Rate

The transcript discusses the relationship between exchange rates and inflation, emphasizing that while the exchange rate is important, the primary focus is on targeting inflation. The speaker explains that the exchange rate affects inflation and the economy, but the central concern is understanding why it moves. The overall goal is to determine the appropriate monetary policy stance to achieve inflation targets.

What is the primary concern when considering currency intervention?

• The interest rate

• The exchange rate

• The unemployment rate

• The level of inflation

What is the main target of monetary policy according to the speaker?

• Exchange rate stability

• Inflation control

• Interest rate adjustment

• Economic growth

Why is the exchange rate considered important in the context of inflation?

• It directly determines the inflation rate

• It is a relative price that affects inflation

• It has no impact on inflation

• It only affects the interest rate

What factors are considered alongside the exchange rate to determine monetary policy?

• Other economic factors driving inflation

• Interest rates and unemployment

• Only the exchange rate

• Government spending and taxation

How does the speaker suggest monetary policy should be adjusted?

• By increasing government spending

• By ignoring inflation targets

• By considering the reasons behind exchange rate movements

• By focusing solely on the exchange rate