Canada's current account balance (on a seasonal adjusted basis) posted a $3.2 billion deficit in the third quarter, narrowing $1.5 billion from the previous quarter. This decline reflected an increase in the investment income surplus and was partially offset by a lower trade in services surplus. The third quarter marked the ninth consecutive quarter in which the current account balance was in a deficit position.
In the financial account (unadjusted for seasonal variation), inflows of funds from abroad to finance the current account deficit in the third quarter came primarily from foreign investment in Canadian debt securities. This was attributable to non-resident investors significantly increasing their holdings of Canadian bonds for a third consecutive quarter. Moreover, foreign direct investment in Canada surpassed Canadian direct investment abroad, also contributing to the net inflow of funds.
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