The real value of a floating currency for Canada lies in helping our economy to absorb some of the impact of external shocks. A classic example would be a sharp movement in the value of our exports relative to our imports, such as occurred in 1997–98, when world commodity prices plummeted in the wake of the Asian crisis.
Since early- to mid-2000, however, these supportive financial conditions have eroded amid concerns that Internet retailers and other “dot-coms” face severe challenges in achieving profitability. Technology and telecommunications stock price indexes began to slump in the spring of 2000, and financing conditions for start-ups cooled off.