The federal government announced plans for a U.S. dollar global bond issue sometime later this week.
Federal finance minister Jim Flaherty said Wednesday that the government plans to issue a U.S.-dollar-denominated global bond at some point this week, subject to market conditions.
The Department of Finance indicates that the planned bond issue will be used to provide funds to boost, and diversify, the government’s foreign exchange reserves and to meet foreign currency requirements.
The government holds its foreign exchange reserves in the Exchange Fund Account (EFA), which provides foreign currency liquidity and supports the Canadian dollar in foreign exchange markets. Funds for the account are raised through either debt issues that are denominated in a foreign currency, cross-currency swaps of Canadian-dollar borrowings, or outright purchases of foreign currency.