My husband borrowed Canadian money from his relative to pay for his American education. At the time the Canadian dollar was .50:1. Now the exchange rate is 1:1 and we are paying back the debt in US dollars. Does this mean that we owe twice as much?


The all time low on the Canadian dollar was 61.79 US cents on Jan 21, 2002.

Yes, it will now cost you about US$1.01 to pay back a Canadian dollar, if when you borrowed you agreed to pay in their currency.

  • Thanks for the answer. So if his education was $300,000 USD should be pay back 447,000 to Canada? – user9829 Apr 19 '13 at 3:46
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    @user9829: He should pay back in CAD what he borrowed in CAD. How much that is in USD is your problem, not the creditors'. – MSalters Apr 19 '13 at 10:43
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    Yeah. He's not paying back twice the debt, he's paying back the debt itself. The fact that the husband took on additional foreign exchange risk is his problem, as MSalters points out, and one he could have mitigated. – ChrisInEdmonton Apr 19 '13 at 13:01
  • Might help to view it from the relatively perspective. They gave you (made up numbers) $123,456 in CAD and are expecting to get back $123,456 in CAD plus possibly some interest depending on the terms. The relative would feel ripped off if you only tried to give him $75,500 in CAD. – Kellenjb Apr 19 '13 at 16:12
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    @Kellenjb - aren't examples supposed to over-simplify? That's the oddest number to offer. How about every $1000 you got, cost your relative CAN$1618 to lend you. Now rates changed and It's US$1634 to pay it back. – JTP - Apologise to Monica Apr 19 '13 at 18:39

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