Flaherty pleased with more stable Canadian dollar

Mon Aug 31, 2009 8:04am EDT
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By Allan Dowd

VANCOUVER, British Columbia (Reuters) - Canadian Finance Minister Jim Flaherty, who warned this month that steps could be taken to curb a sharp rise in the Canadian dollar, said on Sunday he was pleased with the currency's recent stability.

Flaherty said he had been hearing complaints from businesses that volatility in the Canadian dollar was making it difficult for them at a time when the country was already struggling to revive its economy.

"We've seen some relative stability of late, and that's good for our businesses in Canada," Flaherty told a media briefing in Vancouver ahead of a speech to a meeting of international tax and accounting experts.

The Canadian dollar rallied more than 20 percent from a four-year low in March to its 2009 high in August, when comments from Flaherty that steps could be taken to curb its rise helped reverse the trend.

The currency was trading at C$1.0956 or 91.27 U.S. cents, during the overnight session in Asia, weakening from C$1.0949, or 91.33 U.S. cents, just before Flaherty's latest comment.

While the Canadian dollar's rise has been linked to higher oil prices and an improved outlook for the global economy, there have been complaints that it was also being pushed along by speculators.

The Bank of Canada has also expressed concern that persistent Canadian dollar strength could threaten the economic recovery by hampering the country's exporters.


<p>Canada's Finance Minister Jim Flaherty speaks during a lunch in Shanghai August 14, 2009. REUTERS/Aly Song</p>