The federal government is gearing up for a new U.S.-dollar-denominated global bond issue later this week, subject to market conditions, the Department of Finance Canada announced on Monday.

“Issuing a global bond provides funds to supplement and diversify Canada’s foreign exchange reserves for the benefit of Canada’s financial position,” Finance Canada says in its announcement..

The government’s foreign exchange holdings are raised through foreign-currency-denominated debt issues, purchases of foreign currency, and cross-currency swaps of Canadian-dollar borrowing, Finance Canada says. They represent both a source of prudential liquidity, and support the promotion of orderly conditions for the Canadian dollar in foreign exchange markets.