Government is not considering any changes to the existing parity position between the Bermuda dollar and the US dollar - that is the official line from the Ministry of Finance following the release of the latest balance of payments report.

The report, which focuses on the impact of the growth in the strength of the Canadian dollar, revealed that, while the Canadian dollar appreciated against the Bermuda dollar, this occurrence could happen between Bermuda and any other country in the world where a falling dollar turns the tide on exchange rates.

It concluded that this could include the US, whose currency the Bermuda dollar is pegged to, should the one-to-one parity currently in place be switched to an alternative monetary policy.

However, this was later clarified by the Ministry and Department of Statistics as merely a commentary and not a reflection in any way of a possible break in Bermuda's currency peg with the US dollar.

Broken down, the exchange rate movement between Bermuda and Canada increases the cost of education for Bermudian students at college or university in Canada, with tuition and the cost of living becoming more expensive as the salaries and wages earned in Bermuda will be worth less than in previous years when a US dollar was worth more than its Canadian equivalent.

Vice-versa, Canadian workers on the Island are also affected by this, as the stronger Canadian dollar may result in them holding a higher amount of their pay in local banks until exchange rates are more favourable for transferring their monies overseas.

Meanwhile, goods imported from Canada will be more expensive for locals to buy, with more Bermuda dollars needed to purchase one Canadian dollar, but, on the flipside, Bermudian goods and services will become more affordable and attractive to outsiders.

Additionally, travel to the Island by Canadian tourists will be more attractive as travel services become cheaper, and vice versa, with travel to Canada by Bermudian tourists less appealing with travel services becoming more expensive.

Elsewhere, the Bermuda current account recorded a surplus of $278 million in the third quarter of 2007, with the goods trade deficit increasing to $274 million from $249 million at the same time last year.

Bermuda's asset accounts, meanwhile, posted a net outflow of $141 million in this year's third quarter, compared to a total of $857 million last year, due mainly to changes in the financial account.

Current account payments to non-residents rose to $741 million in the third quarter this year from $634 million in the same period in 2006.

The report showed that residents imported more goods in the third quarter 2007, bucking the trend of declines over the first two quarters of the year, as an increase in the value of imports for fuels, food, transport equipment and finished equipment helping to push aggregate imports up by $24 million to a total of $280 million.

But the export revenue declined to $6 million when compared to last year, and accounted for 0.6 percent of current account receipts.

Payments for services was also up to $290 million in the third quarter, with part of the rise in payments for travel services reflected in education travel where unfavourable exchange rate changes spurred an increase in tuition expenses.

Income receipts climbed 19.1 percent to reach $511 million this quarter, making up more than half of the current account receipts, with income payments increasing to $130 million compared to the $100 million attained for the same time last year, largely down to a rise in payments to non-residents for investment income, specifically portfolio investments.