Reuters: Regulatory News: Don't blame export woes on strong C$ - Bank of Canada

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Don't blame export woes on strong C$ - Bank of Canada Aug 22nd 2012, 14:45 OTTAWA | Wed Aug 22, 2012 10:45am EDT OTTAWA Aug 22 (Reuters) - The strong Canadian dollar is not the main cause of the problems exporters are facing and Canada cannot devalue itself to prosperity, Bank of Canada Governor Mark Carney said in a speech in Toronto on Wednesday. Referring to Canada's poor export performance, Carney said: "Some blame this on the persistent strength of the Canadian dollar. While there is some truth in that, it is not the most important reason." Instead, he said, overexposure to the mature and sluggish U.S. market was a more important factor. "Net, our strong currency explains only about 20 percent of our poor export performance," he said. Canada should focus on exporting to faster-growing emerging nations while firms needed to improve the skills of workers and take advantage of new technology, said Carney. "We cannot devalue ourselves to prosperity or cut ourselves off from the world and hope to rely on ever-increasing borrowing by Canadian consumers," he added. Carney -- repeating language the Bank used last month when keeping rates unchanged -- said "some modest withdrawal of the present considerable monetary policy stimulus" might become appropriate.

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