Canada's Flaherty: Strong Canadian Dollar Here To Stay (iMarketNews)
WASHINGTON (MNI) - Canadian Finance Minister Jim Flaherty Wednesday made clear his belief that a Canadian dollar at or above parity with the U.S. dollar is set to become a permanent feature of the foreign exchange landscape.
A relatively high Canadian dollar "is a reality," he said, arguing that it makes sense for the Canadian dollar to be much closer in value to the U.S. dollar than it was for some years.
Speaking to reporters following a speech at the Woodrow Wilson Center in Washington, Flaherty said the appreciation of the Canadian dollar is to be expected and is part of a longer-term development.
In part, it reflects the country's sound fiscal situation, he said, and it would be "unreasonable," given the country's fundamentals, for anyone in Canada to expect the Canadian dollar to return to the days when it was significantly devalued vis-a-vis the U.S. dollar and the euro.
"I would expect that we will see gradual accommodation to the reality of the relatively higher Canadian dollar by Canadian manufacturers," Flaherty assured.
In his prepared remarks, Flaherty commented on what tasks lie ahead for the G-20 in 2011. He said it is Canada's view that rebalancing needs to occur in the global economy as imbalances have begun to widen again.
"Governments in advanced economies must return to living within their means. For advanced economies, one key response is to set out credible and clearly communicated plans for restoring fiscal balance and reducing debt to GDP rations," he said.
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