Peterborough, Ontario’s largest city, is now seeing an increase in foreign exchange rates, according to the city’s foreign exchange manager.
The foreign exchange rate at the city center has increased by more than 5.8 per cent since July 1.
“There’s been a big uptick in the foreign exchange market, especially for foreign exchange purchases, because we’ve been seeing the demand for foreign currency,” said Peterborough city manager Paul Waggoner.
“So it’s been pretty crazy.
I mean, if you have a foreign exchange account, you can get a discount.”
The increase in rates has come in response to a number of factors.
Foreign exchange purchases at Peterborough’s major financial institutions have increased by nearly 50 per cent in the last month alone.
“A lot of the money that we’re seeing coming in now is coming in from overseas, from a number that we have no control over,” said Waggoni.
“We do a good job of controlling the exchange rate, but we can’t control what happens to the foreign currency that’s going in.
It’s all on the other end of the ledger.”
Peterborough’s foreign currency rate has risen from 1.25 per cent to 1.48 per cent over the last year.
The city is one of only a few places in Canada that charges foreign currency exchange rates on a daily basis.
Waggone said it’s not uncommon for businesses in Peterborough to be able to receive a 15 per cent discount from their local currency exchange rate.
The local dollar has been gaining against the U.S. dollar for the past two years.
In January, the U, which is also the official currency of Canada, reached a record high of 98.50 cents US.
In August, the Canadian dollar hit a new high of 103.70 cents US a U.K. pound.
But Peterborough has been seeing a spike in foreign currency purchases, especially in the past month.
In March, the city recorded $50 million in foreign trade with the U: “It’s a very volatile exchange rate environment, so it’s quite challenging to keep the level of foreign currency at the same level as it’s at now,” said Mr. Wagner.
The city has also seen a spike from overseas.
In June, the Toronto Stock Exchange reported $6 million in trades in U.A.E. dollars for the month.
But that figure doesn’t include the $1.5 million worth of trade in foreign currencies that the city has already made in that same month.
“It’s quite a big spike in the market right now, and we’ve seen that with our foreign exchange,” said the city manager.
Peterborough has a long history of dealing with foreign currency.
The community was the last to declare a war in the early 1900s.
Its first currency was the Canadian franc, which was replaced in the 1950s by the U of T’s American dollar.
That changed in the 1960s, when Canada adopted the U and the US. currencies.
Peterborough was one of the first Canadian cities to adopt foreign exchange.
But there have been challenges to keeping the foreign-currency exchange rate within the city limits.
Foreign-currency transactions aren’t counted toward the city budget because of a provincial government requirement that a certain percentage of the revenues from the transaction be returned to the province.
Waddoni said he believes the province has a better understanding of the risks of foreign-exchange trading than the city.
“They’ve seen it and they’ve got a handle on it.
They understand what it’s doing to the economy and how to manage it,” said Gail Riehl, an associate professor at Dalhousie University’s Faculty of Public Affairs and International Relations.
“There’s no question that the province needs to be aware of the impacts of foreign exchange.”
While foreign exchange fluctuates, Peterborough says the city can use foreign exchange to help it offset its higher costs and keep up with growing demand for housing, schools and hospitals.
“If we were to look at what it would take to have a better business environment, to have people come in, to grow our economy, it would be a pretty big increase in our foreign currency holdings,” said Riell.
The mayor says foreign currency has also helped the city meet the rising cost of living.
Peterhamians have also been keeping an eye on the city of Edmonton’s recent rate hike, which has caused some to question the city, saying it’s too low.
“We do have some of the highest inflation rates in the country,” said city manager Waggon.
“And the city is in the process of adjusting its rate to reflect that.”
Peterham’s foreign-dollar exchange rate will increase from $3.40 per U.E.-denominated dollar to $3,400 per U,E.
The City of Peterborough wants the international community to be cognizant of Peterham’s recent currency fluctuations.