The Bank of Canada is responsible for formulating the country's monetary policy, issuing currency, managing foreign exchange reserves, and overseeing the financial system's stability. The Bank's primary objective is to promote the economic and financial welfare of Canada, with a focus on maintaining price stability by controlling inflation.
The Bank of Canada operates independently of the government in setting monetary policy, though it works within a framework established by the government. One of its key tools for controlling inflation is setting the overnight interest rate, which influences interest rates across the economy.
The Bank is also responsible for issuing Canadian banknotes and managing the country's monetary policy framework.