Monetary Policy Case Study

The Appreciating Canadian Dollar: The Implications for the Canadian Economy

OR

Abstract:
The Canadian dollar, also called the 'loonie', had been traditionally based on the floating exchange rate. Based on its purchasing power, it was opined that the loonie's value was perfect at $0.815. However, the loonie, which was traded at $0.8934 in 1991, continuously fell till 2003, before it again started surging at a rapid pace.

Pedagogical Objectives:

To discuss the reasons for the fall of the loonie since 1991, apart from the factors that prompted its sharp rise since January 2003, and its implications for the Canadian economy.

Keywords : Canada, Canada's economy, Canadian dollar, Loonie, Floating exchange rate, Exchange rate, Fixed exchange rate, History of the Canadian dollar, Dominion Notes Act, Bank of Canada Act, Monetary Policy Case Study, Effects of currency fluctuations on economy, International Monetary Fund, Anti-inflationary policies of Canada, Factors affecting currency appreciation, Currency fluctuations