Jim Flaherty says intervention is a limited tool

Wed Oct 28, 2009 9:55am EDT
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OTTAWA (Reuters) - Canadian Finance Minister Jim Flaherty said on Wednesday he agreed with the Bank of Canada that intervention was a limited tool when it came to trying to drive down the value of the Canadian dollar.

Bank of Canada Governor Mark Carney said on Tuesday that foreign exchange intervention did not usually work without complementary policy moves.

"I agree with what the governor of the bank said yesterday .... that it is a limited tool," Flaherty told reporters.

Manufacturers complain that they are being hit by the high value of the Canadian dollar. But Flaherty said sharp fluctuations in the currency are the major concern.

"The primary concern of business is volatility," said Flaherty.

(Reporting by Randall Palmer, writing by David Ljunggren; editing by Jeffrey Hodgson)