How the Canadian dollar’s plunge will juice the economy


The rapid plunge in the Canadian dollar may be troubling to some, but it promises to provide a badly-needed boost to the economy.

Which is why Canadian policy makers are no doubt not wringing their hands.

The loonie, as the country’s dollar coin is known, sank by almost 7 per cent last year, and is down a further 3 per cent so far this year, its decline largely driven by weak economic readings and the promise of a very easy-going Bank of Canada under governor Stephen Poloz.

According to a new report from Bank of Montreal today, a 10-per-cent drop in the currency could translate to a boost to gross domestic product of up to 1.5 percentage points over two years.


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