A Quick Look at Canadian Currency Exchange

Being the second largest country in the world, one of the wealthiest, and bordering the most powerful economy in the world, it would be of interest to look at the Canadian currency exchange. Canada and the US have the world’s largest trading relations. Fluctuations in Canadian currency or that of the US dollars would, therefore, have serious impacts on the levels of inflation, output growth, which would in turn impact on Canadian’s economy.

But to a large extent, the output growth has remained stable within some margins in past years partly due to a stable exchange rate. A stable output growth is essential for keeping inflationary pressures down and for the creation of a favorable environment for investors. A stable exchange rate was made possible through the intervention of the monetary policy, which was aimed at controlling the interest rates and rate of inflations, and Bank of Canada’s Open Market Operations (OMO).

Canadian currency is dollar denominated

Canadian currency is dollar denominated. The dollar is further subdivided into cents, similar to the US, New Zealand and Australia. She pursues a flexible (floating) exchange regime where the value of the currency is determined to a large part, by the currency exchange markets. However, as stated before, the government, through a set of policies or by other means, intervenes from time to time to mitigate market fluctuations and pursue economic goals.

Though US dollars are widely accepted in Canada, Canadian dollars are rarely accepted in the US apart from the bordering regions. There is, however, a possibility of unification of the US dollar with Canadian dollars due to trade partnership, political stability, synergistic gifts, cross-border spending, globalization, effective collaboration, and to facilitate the North American Free Trade Agreement (NAFTA).

Where to Exchange
You can exchange your currency in a legalized financial institution be it a trust company, a commercial bank or FOREX centers. Though some hotels in Canada do accept US dollars, they offer lower rates than those offered in airports and financial centers. Major hotels, stores, restaurants and airports do the exchange at the same rate as official money changers.

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