Pace of dollar fall a cause for concern

Abu Dhabi: The pace at which the US dollar is weakening is complicating the exchange rate situation for producers and exporters, due to the necessity of equally quick adjustments, especially in countries with appreciating currencies against the dollar, according to a top Canadian official.

"The problem is the speed by which the Canadian dollar has been appreciating against the dollar, increasing in value by more than 20 per cent last year alone," David L. Emerson, Canada's minister of international trade, told Gulf News. "However, the short-term difficulties are offset by two facts, first of which is the increasing liquidity in Canada, as the case is with the UAE, which results in more demand, hence jobs creation and growth," the minister explained.

Outlook

"Moreover, within a timeframe of three years, a strong Canadian dollar will eventually result in more investments in technology and equipment, and will encourage Canadian firms to acquire more foreign assets," he added. The UAE's imports from Canada stood at Dh1.96 billion in 2006, or 0.7 per cent of the total, and exports amounted to a mere Dh31 million, or 0.1 per cent of the total.

"We have designated the GCC states, including the UAE, as a strategic priority. Our trade with the UAE has been witnessing double digit growth, as the country accounts for a quarter of our total trade with the region," Emerson said.

"Canada intends to push these figures further, as the negotiations to reach a free trade agreement with the GCC have begun."