- François Dupuis, Vice-President and Chief Economist • Hendrix Vachon, Senior Economist
Could inflation accelerate sharply due to the weak Canadian dollar?
When a currency depreciates, like the Canadian dollar has been doing in recent years, positive impacts on the economy are generally expected, in particular thanks to an increase in exports. Business investment can also head up if businesses become more profitable and growth in foreign demand justifies greater production capacity. That said, currency depreciation also brings its share of inconveniences. The most predominant negative effect is probably consumers’ loss of purchasing power.
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