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Canadian Dollar Sinks To Another Record Low

Fri., Jan. 30, 1998

For a third straight day, the Canadian dollar sank to a new all-time low Thursday.

It closed in Toronto at 68.25 U.S. cents, down from 68.57 cents at Wednesday’s close.

Prime Minister Jean Chretien said he was not alarmed by the dollar’s slide, but said it should be performing better.

“We have no more deficit, we don’t have inflation, unemployment is declining, we have begun to pay the debt, but the dollar is lower than it should be,” Chretien said.

The dollar’s plunge has left currency speculators and economists split as to whether the Bank of Canada should raise interest rates to defend the currency.

Sherry Cooper, chief economist at the investment firm Nesbitt Burns, said the dollar could soon fall below the 68-cent mark without a rate increase of at least half a percentage point.

Other analysts insist the Bank of Canada is right to let the dollar find its own way in an economy where strong growth, low inflation and smaller budget deficits are the norm.

Tags: business

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