TORONTO (Bloomberg) - Canadian Prime Minister Stephen Harper said he agrees the surge in the country's currency to record highs earlier this month was speculative in nature and requires attention.

Harper said he's in accord with comments made by Finance Minister Jim Flaherty on November 23 that the Canadian dollar had reached "speculative heights." The currency has retreated since touching a record 90.58 Canadian cents per US dollar on November 7.

"Of course I agree with the minister of finance's statements on the dollar," Harper told reporters in Kampala, Uganda, where he was attending a meeting of leaders from the Commonwealth group of nations.

The Canadian currency has gained 21 percent this year and more than 59 percent against its US counterpart in the past five years, prompting economists to slash their growth forecasts for the world's eighth-biggest economy and fuelling calls for help to businesses hurt by the stronger currency.

Recent data have shown contractors are taking out fewer building permits, factories are shipping out fewer products and retail sales are on the decline.

The government of Quebec, the French-speaking province where much of Canada's factory sector is based, on November 23 said it will free up C$620 million ($628 million) to help its manufacturers adapt to the new reality.

The Bank of Canada, meanwhile, is hinting it may be poised to lower its 4.5 percent benchmark interest rate. Bank of Canada Governor Pierre Duguay said November 20 that volatility in foreign- exchange markets has been "extremely high" and the Canadian dollar's rapid advance requires "particular attention."

The comments came three days after Bank of Canada Governor David Dodge told reporters the "downside" risks to global growth have increased in recent weeks and could have an impact on policy makers.

The government agrees with recent statements by central bank officials on the dollar, Harper said yesterday.

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China is progressing with foreign-exchange reform and the mechanism plays an important role in "adjusting" the nation's trade balance, central bank Deputy Governor Su Ning said.

The rate of the yuan also plays an important role in sustaining the nation's economic growth, Su said on Friday at a financial conference in Beijing.

"The foreign-exchange mechanism will help improve the economic structure and lead to industry upgrading," he said.

European and US officials have been urging China to allow it currency to appreciate faster to reduce global imbalances in trade they say are threatening manufacturing jobs. They claim the Asian nation keeps the yuan undervalued to support exports.

China will consider widening the yuan's 0.5 percent daily trading limit "if necessary" and gradually allow the currency to move more freely, central bank Governor Zhou Xiaochuan said in Cape Town, South Africa, on November 18.

"The currency's gain will lead exporters to be less reliant on price competition and will force companies to be more competitive and use their resources more efficiently," said Li Huiyong, a currency analyst at Shenyin Wanguo Research and Consulting Co. in Shanghai.