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Total entries in catalog: 33
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During the late 1950s, Canadian authorities became concerned about a deterioration in Canada’s international competitiveness, aggravated by its strong dollar, which continued to be supported by substantial capital inflows. After the investment boom of the mid-1950s, economic activity had slowed significantly, and the unemployment rate more than doubled from 3.4 per cent in 1956 to 7.2 per cent in 1961. In this environment, the government sought to ease policy in order to support demand and reduce the economic slack in the economy.
1962-70 | Views: 934 | Added by: gogoshvab | Date: 2010-02-20



As a member of the International Monetary Fund (IMF), Canada’s decision to float the Canadian dollar was at odds with its commitment to the Fund to maintain a fixed exchange rate within the Bretton Woods system. In this regard, in 1949 the Canadian authorities had established with the IMF a "par value” of US$0.9091 with a fluctuation band of ±1 per cent. The decision was also taken over the opposition of IMF staff who recommended more vigorous foreign exchange intervention or the imposition of controls on capital inflows (IMF 1950).79 There were also concerns that Canada had "gravely compromised and embarrassed” the IMF and had set a bad example for other "less responsible members” .
1950-62 | Views: 514 | Added by: gogoshvab | Date: 2010-02-19


 
By mid-1950, the depreciation of the Canadian dollar against its U.S. counterpart the previous year, combined with rising commodity prices associated with the beginning of the Korean War in June 1950, had significantly strengthened Canada’s trade balance with the United States. At the same time, the economic recovery in Europe, aided by the Marshall Plan, which provided European countries with convertible U.S. dollars, boosted Canadian exports. There were also strong inflows of direct investment into Canada. Short-term capital inflows also increased sharply, particularly through the third quarter of 1950, as speculation regarding a Canadian-dollar revaluation intensified.
1950-62 | Views: 1106 | Added by: gogoshvab | Date: 2010-02-19

During the 1940s, there was an active debate over whether the unofficial rate was the "true” value of the Canadian dollar. The Bank of Canada maintained that, given the "limited use” of inconvertible Canadian dollars and the small size of the market, prices were not necessarily an accurate reflection of sentiment towards the Canadian dollar (FECB 1947, 5).
1939-50 | Views: 509 | Added by: gogoshvab | Date: 2010-02-19


 
Shortly after the imposition of exchange controls in 1939 and the official fixing of the Canadian dollar’s value in terms of the U.S. dollar by the FECB, an unofficial market for Canadian dollars developed in New York that persisted until the Canadian dollar was floated at the end of September 1950. This was a legal market involving transactions in Canadian dollars between nonresidents of Canada. Residents of Canada were prohibited from acquiring foreign exchange through the unofficial market. Similarly, no resident of Canada was ever authorized to convert foreign exchange into Canadian dollars through the unofficial market.
1939-50 | Views: 474 | Added by: gogoshvab | Date: 2010-02-19