OTTAWA (Reuters) - The Canadian government and Bank of Canada are not considering intervening in foreign exchange markets to weaken the country’s currency, Finance Minister Jim Flaherty said on Monday.
The Canadian dollar hit a 13-month high last week after the U.S. Federal Reserve took aggressive action to spur growth. The Canadian currency’s rise has put additional pressure on exporters already struggling with soft U.S. demand.
“There are a couple steps we could take. We have an agreement with the Bank of Canada in that regard and the governor and I can take certain actions, but they’re very limited in effect,” he told reporters in Ottawa when asked about what options policymakers have.
Asked whether he was considering using those tools at the moment, Flaherty replied “no”.
In a newspaper interview published on Saturday, Flaherty said intervening in foreign exchange markets to weaken Canada’s soaring dollar would have only limited impact because currencies typically reflect a country’s fundamentals.
Flaherty told reporters on Friday that volatility in the Canadian dollar is worrying, but that the currency’s strength partly reflects faith in the country’s economic fundamentals.
With additional reporting by Claire Sibonney; Writing by Jeffrey Hodgson; Editing by Peter Galloway