For now at least, Thursday's move by the Bank of Canada to slow the deterioration of the Canadian dollar by hiking its key interest rate one full percentage point to 6 percent seems to have worked.
As a result of the central bank hike, Canada's commercial banks immediately kicked up their prime lending rates by a full percentage point to 7.5 percent.
But at first those were the only numbers moving up. The Canadian dollar, hit by the financial hurricane sweeping the globe, fell more than half a cent against the U.S. dollar, closing Thursday at another record low of 63.31 U.S cents.
But on Friday the Canadian dollar belatedly recovered to close at 64.06 U.S. cents.
The question is, what's next?
"There's no way to put a pin in the map," said Randal Powley, senior economist with Toronto-based Scotiabank. "Canada's dollar is hostage to world events and the rush of frightened investors to the U.S. dollar and away from any currency -- like Canada's -- that's seen as tied to falling commodity prices."
Hedge funds are behind the loonie's decline, he said.
"They are taking short positions on securities and markets worldwide. When it looks like they've found a bottom, they will cover the shorts and the (dollar and the) markets will rebound in a big way," he said.
Part of the problem is centered in investor fears that Russia will flood world markets with commodities like oil and gold that Canada also produces, and this has left Canada's dollar hanging on the wings of these world events.
Canadian Finance Minister Paul Martin tried to put the best face on the mounting crisis in the financial markets, suggesting that, like hurricane Bonnie, the market storm would pass and Canada's fundamental strength would survive.
"Canada is in a very strong position to weather the storms that are affecting international markets. And once these storms have abated, there is no doubt that our currency will begin to reflect the strong fundamentals of our economy," Martin said.
Ruth Getter, senior economist with the Toronto Dominion Bank, said the decline in the dollar will have little impact on the average Canadian. Even the prospect of higher prices for imported fruit and vegetables from the U.S. this winter has been overstated, she explained, because weaker currency countries in central and South America also export produce to Canada.
But Canadians are starting to worry. A recent poll by Toronto-based Pollara Research, found the damaged dollar is now the No. 1 concern of Canadians. The poll, conducted last week, found 62 percent of respondents said they were very concerned about the dollar and 25 percent were somewhat concerned.
However, 62 percent also said they believe the dollar's value will recover within the next 12 months.
Ms. Getter said the central bank has two tools to stabilize the loonie -- raising interest rates and buying up large quantities of the Canadian dollar.
"They've tried both and failed both times. Now we have higher interest rates and a lower dollar," she said. "In the end, they just have to ride out the storm because crises don't last forever."
Canada's stock prices are down, too. The Toronto Stock Exchange's key index is down nearly 28 percent in two months.
The sharp decline in both the loonie and Canadian stocks have resulted in some international bargain hunting, Powley noted.
In the first quarter of 1998, foreign investors pumped nearly $5 billion (U.S.) into Canada, and by year-end that number could reach a record $17 billion, more than double the last record of $8 billion set in 1995.