Canadian government bolsters foreign reserves
Canada issues US-dollar global bond
On April 19, 2023, the Canadian government issued USD 4 billion in five-year global bonds.
Issuing a global bond provides funds to supplement and diversify funding sources for Canada’s liquid foreign reserves. Liquid foreign reserves are a source of prudential liquidity and promote orderly conditions for the Canadian dollar in foreign exchange markets.
The investor base for the five-year bond issue includes a wide range of central banks, international institutions, bank treasuries, and foreign-based investment funds.
The issuance of this global bond is in line with the government’s commitment that was stated in the budget for 2023. It is a commitment to maintain liquid foreign reserves at or above 3% of nominal gross domestic product.
The issuance shows strong global demand as evidenced by the final order book of over USD 13 billion.
The bond transaction will provide cost-effective and diversified funding for the liquid currency reserves held in the Foreign Exchange Fund account.
The last time the Canadian government issued USD 3.5 billion bonds was in April 2022.
