The increase can be attributed to three main factors: a higher than expected figure for national banknotes in circulation, which forms the basis of estimates of the launch stocks; a higher forecast for the use of low-denomination banknotes; and a somewhat slower than previously expected development in the use of electronic money.
We allowed the market to set its own level for the currency, with the intention of re-fixing the Canadian dollar at a new level later on. What was surprising was just how quickly the speculative flows eased once we floated our currency. As it turned out, the Canadian dollar appreciated by just 5 per cent during the following three months.