Canada's new central bank governor wants to modernize the central bank's approach to globalization and sophist

Question

Canada's new central bank governor wants to modernize the central bank's approach to globalization and sophisticated financial markets. What is the one thing he doesn't want to do with the loonie?

Answer 1

The monetary system must adjust with the change of time particularly toward globalization because it is the trend in the modern time.

Answer 2

the U.S. dollar. - works

Answer 3

So he wants to make the "loonie" (lol) globalized? Yeah, I don't think that's going to happen.

Answer 4

Interesting question...I enjoyed the research.  Float vs Fixed.   Thanks.

The Canadian dollar returned to a fixed exchange rate regime in 1962 when its value was set at about US$0.925, where it remained until 1970. As an inflation-fighting measure, the Canadian dollar was allowed to float in 1970. Its value appreciated and it was worth more than the U.S. dollar for part of the 1970s. The high point was on 25 April 1974, when it reached US$1.0443.

The Canadian dollar fell in value against its American counterpart during the technological boom of the 1990s that was centred on the United States, and was traded for as little as 61.79 cents U.S. on 21 January 2002, which was an all-time low. [5] Since then, its value against all major currencies has risen due, in part, to high prices for commodities (especially oil) that Canada exports. Its value against the U.S. dollar rose sharply in 2007 due to the continued strength of the Canadian economy, and to the U.S. currency's recent weakness on world markets. During trading on 20 September 2007 it met the U.S. greenback at parity for the first time since 25 November 1976 .[6]

Inflation in the value of the Canadian dollar was fairly low since the 1990s, but had been severe for some decades before that. In 2007 the Canadian dollar rebounded remarkably, soaring 23% in value. On 28 September 2007, the Canadian dollar closed above the U.S. dollar for the first time in 30 years, trading at US$1.0052. [7] On November 7, 2007, it hit US$1.1024 during trading, a modern-day high[8] before slipping back to $1.093 by 10:00 AM Eastern time, after China announced it will diversify its $1.43 trillion US of foreign exchange reserves away from the U.S. dollar. (it has been as high as US$2.78, which was reached on 11 July 1864 after the United States had temporarily abandoned the gold standard)

Since 84.2% of Canada's exports go to the United States, and 56.7% of imports into Canada come from the United States,[9] Canadians are mainly interested in the value of their currency against the United States dollar (USD).

On world markets, the Canadian dollar historically tended to move in tandem with the U.S. dollar, but less dramatically. A consequence is that at times an apparently rising Canadian dollar is often falling against most of the world's currencies, and vice-versa. However, during the relatively sharp rise of the Canadian dollar since 2002, it has "parted ways" with the U.S. dollar and has gained value against it, while also rising against other major international currencies.

Although there was a great deal of domestic concern when the Canadian dollar was trading much lower than the U.S. dollar, there is also concern among exporters when the dollar appreciates quickly. The rapid rise in the value of the Canadian dollar increases the price of Canadian exports to the United States, which make up a large part of the economy. On the other hand, Canadian industry enjoys advantages from a rising dollar, primarily in that it is cheaper to purchase foreign material and businesses. The Bank of Canada has no specific target value for the Canadian dollar and has not intervened in foreign exchange markets since 1998.[10] The Bank's current position is that market conditions should determine the worth of the Canadian dollar.

By November 30, however, the Canadian dollar was once again at par with the U.S. dollar, and on December 4, the Canadian dollar had retreated back to US$0.98 by the intervention of the Bank of Canada (through a cut in interest rates) due to their concern about Canadian exports to the U.S. It has since recovered to approximately C$1 = US$1.001.

Due its soaring value and new record highs against the American currency, the Canadian dollar was named the Canadian Newsmaker of the Year for 2007 by Time Magazine [11]

Answer 5

To peg it to the U.S. dollar.