As silly as it was to be ashamed of a weak loonie, it’s just as absurd to take pride in the Canadian dollar’s recent strength. Attaching outsized significance to the currency invites bad monetary policy.

A surprising number of otherwise intelligent people seem to have a great emotional investment in the value of the loonie. To be sure, the price of the currency is important as a determinant of buying power, as a factor of production and as a store of value. It matters, but only in the same way that the price of a barrel of oil or an ounce of gold matters.

Yet, the significance that’s attached to the loonie seems to be closely tied to Canada’s fragile national identity. The loonie’s recent rise to parity with the U.S. dollar is being treated as if it’s a source of national pride rather than just an invitation to shop south of the border.

In fact, the loonie’s recent rise merely represents high commodity prices and a weakening US$ — neither of which have much of anything to do with Canada’s merit as a nation.

Parity with the US$ is something that roughly a third of Canadians have never experienced. So, those under 30 can perhaps be excused for marvelling at the novelty. But everyone else in the country — and that includes senior policy-makers such as Bank of Canada Governor David Dodge and federal Finance Minister Jim Flaherty — has been here before, even if the memory has faded over the past 30 years.

For this latter group, the recent return to parity should serve as a warning against the sort of misguided measures — foreign investment constraints and wasteful subsidies — that past policy-makers have adopted, invoking the currency as the excuse. And they shouldn’t be lured into monetary policy decisions based solely on the loonie’s latest oscillations.

Let markets dictate the value of the currency. Monetary policy should remain focused on inflation. Fiscal policy should be focused on creating an environment in which business and workers can adapt and adjust to factors such as foreign exchange fluctuations.

The price of the loonie should be just one among many factors guiding these decisions, not a reason to act on its own. People must abandon their irrational emotional attachment to the currency and allow markets — and policy-makers — to do their work.