So, with the boom in the prices of energy and non-energy commodities since 2003, we have seen a marked Type One appreciation of our currency. But this is not the whole story. Another factor driving the Canadian dollar higher since 2003 has been a broad-based weakening of the U.S. dollar.
In so doing, we believe the restrictions are mitigating the systemic risk of a housing market downturn that becomes more likely as house prices and debt levels become more stretched. We also believe that the LVR restrictions have helped to make banks’ balance sheets more resilient to any adverse housing market shock. I will come back to the LVRs shortly. 5.