How Brexit uncertainty is weighing on Canada’s currency reserves

Brexit has already cost Canada several hundred million dollars in paper losses.

The value of British pounds held in federal government reserves totaled US$5.85 billion as of June 30, according to new data from the finance department. That figure compares to US$6.14 billion worth of United Kingdom currency Canada held one month earlier.

Ottawa didn’t sell any of its British pound holdings in the month, indicating the nearly US$300-million loss in value can be attributed to the British currency’s decline ever since the so-called Brexit vote on June 23, when U.K. residents voted to leave the European Union.

“Canada's reserve assets are managed in a prudent manner that is not based on expectations of currency values,” said finance department spokesman Jack Aubry in a statement to BNN.  

The day before that vote, federal Finance Minister Bill Morneau told BNN he was not concerned about the value of Canada’s British pound holdings, arguing Ottawa takes a longer-term perspective on how it manages foreign currency reserves.