UPDATE 1-Canada net foreign debt drops almost 25 percent in 1st qtr

Wed Jun 19, 2013 8:39am EDT

* Higher foreign stock markets behind drop in net debt

* Drop in value of Canadian dlr also boosts asset value

OTTAWA, June 19 (Reuters) - Canada's net foreign debt dropped almost 25 percent in the first quarter of 2013 as higher foreign stock markets boosted the value of Canadian assets abroad, Statistics Canada said on Wednesday.

Net foreign debt fell to C$231.3 billion ($226.8 billion) from C$302.1 billion in the fourth quarter, the agency said.

Canada's international assets grew during the quarter on stronger foreign stock markets, in particular a 10.0 percent increase in the U.S. stock market, where more than half of all foreign equities owned by Canadians are traded.

A 2.0 percent depreciation in the value of the Canadian dollar against its U.S. counterpart also boosted the value of foreign-denominated holdings.

The country's liabilities also grew on sustained foreign investor interest in the Canadian economy. Canada's net foreign debt was negligible as recently as 2007, but grew steadily in the wake of the international economic crisis.

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