Resourceproducing countries with falling terms of trade, such as Canada, Australia and Mexico, have seen their currencies depreciate against countries that are net consumers of resources, such as the United States. It is not a coincidence that the Canadian dollar is about where it was back in 2003 and 2004; oil prices are also about where they were back then.
On the country’s monetary conditions, ample domestic liquidity and the healthy growth in bank lending continue to support economic growth. Domestic liquidity grew by 12.4 percent in June 2016, reflecting robust domestic credits. Bank loans, which increased by 17.6 percent, continue to flow into the country’s productive sector.