Canada borrows abroad for one reason: to defend its currency. Any ominous creakings in the Canadian dollar’s exchange rate have been silenced traditionally by a combination of private placements and public issues. The most famous private placement is due for repayment this month. Five years ago, the government of Canada borrowed $300 million front the Saudi Arabian Monetary Agency at a coupon of 16 1/4 % .
Last month the Ministry of Finance in Ottawa launched a short-term note programme in the US.
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