OTTAWA--The Bank of Canada and the country's finance department agreed Thursday to renew the central bank's inflation-targeting framework for another five years, with an emphasis on keeping headline inflation at 2%.

The central bank was among the first to adopt an inflation-targeting regime in the early 1990s, with a goal to set interest rates to achieve and maintain 2% inflation. According to a joint statement, the government and central bank said the 12-month change in the consumer-price index would act as the beacon for policymakers.

"The experience of the past five years has reinforced the value of a clear and credible inflation-targeting framework that provides the bank with the mandate and the flexibility to respond decisively to changing economic conditions," the central bank and finance department said in the statement.

Further details will be forthcoming in a speech that Bank of Canada Gov. Tiff Macklem is scheduled to deliver Nov. 24 in Toronto.

Unlike the renewal in 2021, references to securing maximum employment were absent in the joint statement. The Federal Reserve has a dual mandate of achieving low, stable inflation and maximum employment through rate policy.

"I think it's interesting that there's less emphasis on employment and on core inflation in favor of more emphasis on headline inflation," BMO Capital Markets' economist Shelly Kaushik said after reviewing the joint statement. "I think more focus on headline inflation certainly reads as more hawkish over the short term."

In a speech last year, Macklem said officials had no intention of modifying the 2% target. Instead, he said, officials were reviewing whether policymakers have the right gauges of core inflation in place, and whether shelter costs are distorting certain inflation readings.

The latest CPI report for Canada indicated that prices rose 3.1% in September from a year ago, while indicators of core inflation--which strips out energy and food prices--remained stable and close to 2%. The Bank of Canada late last month raised its policy rate by a quarter point, to 2.5%, on the expectation that total inflation will remain above 3% until late next year.

Economists like David Rosenberg of Rosenberg Research have argued that rate hikes might not be necessary given readings of core CPI, which are meant to focus on underlying price movements by stripping out volatile items.

The Bank of Canada faced criticism earlier this decade when inflation ramped up to historically high levels shortly after the peak of the Covid-19 pandemic, forcing Macklem and senior officials to aggressively raise rates, sparking a slowdown in economic activity.

The central bank said it thoroughly reviewed that period "and harvested lessons" about setting rate policy. "The bank views the episode not as a failure of the framework's design, but as a challenge to its implementation amid extraordinary global shocks," the joint statement said.