Bank of Canada Governor Stephen Poloz said the Canadian dollar’s recent drop is “icing on the cake” for the nation’s exporters as accelerating U.S. growth lifts the economy.
The decline of Canada’s currency reflects broad strength in the U.S. dollar, which is appreciating against currencies including the Australian and Canadian dollars and the euro, Poloz told the Senate banking committee. “That can have an icing on the cake effect on exports,” he said.
The Bank of Canada predicts the country will increasingly rely on exports to drive economic growth, taking over from debt-burdened consumers. The central bank forecast this month exports will contribute an average of 1.4 percentage points to gross domestic product this year and next, double the 0.7 points in 2013.
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