loonie.jpg

Loonie overvalued by 10%, dragging on Canadian growth: CIBC

The Canadian dollar is overvalued by 10%, CIBC economists say.

CIBC World Markets says the loonie has been overvalued by 10 per cent since the recession, that has saddled Canadians using the equivalent of a 90 basis point higher interest rate from the Bank of Canada.

“Oil\’s tumble has brought the Canadian dollar down with it,” said Nick Exarhos and Avery Shenfeld, economists at CIBC World Markets. “But our currency continues to be richer than it may look.”

The loonie has recently been trading at 81 cents from the U.S. dollar, and it is down some 6 per cent against the greenback so far this year.

FP0626_LoonieTradeBallance_C_MF

Related