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

CIBC World Markets says the loonie has been overvalued by 10 per cent since the recession, which has saddled Canadians with 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 is still richer than it may look.”

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

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