2001 Annual Report to Parliament on the Operations of the Exchange Fund Account

by the Minister of Finance and Report of the Auditor General to the Minister of Finance on the Examination of the Accounts and Financial Statements of the Exchange Fund Account

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Table of Contents

Introduction.

• Objectives.
• Governance.
• Key Principles.
• The Gap between Foreign Currency Assets and Liabilities.
• Recent Developments.

Foreign Exchange Market Developments.

• International Financial Developments during 2000.
• (1) First Half of 2000 - Stronger Growth Raises Concerns About Inflation.
• (2) Second Half of 2000 - Economic Conditions Begin to Show Signs of Weakness.

Financial Review.

• Foreign Exchange Market Intervention.
• Amount and Composition of Canada's Official International Reserves.
• Term Structure of EFA Investments and Liabilities.
• The Exchange Fund Account's Revenues.
• The Exchange Fund Account's Costs.
• Financing of EFA Assets.
• Risk Management.

Financial Statements.

• Management Responsibility for the Financial Statements.

Auditor's Report.

Exchange Fund Account.

• Balance Sheet.
• Statement of Revenue.

Notes to Financial Statement - December 31, 2000.

• Authority and Objective.
• Significant Accounting Policies.
• Official Government Operations.
• Risk Management and Financial Instruments.
• Marketable Securities Denominated in US Dollars.
• Assets Denominated in Other Foreign Currencies.
• Special Drawing Rights (SDR).
• Gold and Gold Loans.
• Due to the Consolidated Revenue Fund (CRF) - Advances.
• Commitments.