The Canadian Dollar as a Reserve Currency

Lukasz Pomorski, Francisco Rivadeneyra and Eric Wolfe
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Eric Wolfe: Bank of Canada, https://www.bankofcanada.ca/

Bank of Canada Review, 2014, vol. 2014, issue Spring, 1-11

Abstract: This article provides an overview of the growth of Canadian-dollar-denominated assets in official foreign reserves. Based on International Monetary Fund data and on internal Bank of Canada analysis, we estimate that the total reserve holdings of Canadian-dollar assets increased from negligible levels before 2008 to around US$200 billion in the third quarter of 2013. We discuss the determinants of this increase, as well as its potential impact on Canadian debt markets, for example, lower yields and therefore reduced financing costs for the Government of Canada, and the possible negative impact on market liquidity.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bcarev:v:2014:y:2014:i:spring14:p:1-11

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