Bank of Canada: Explainers

Latest explainers

• Understanding seigniorage
  At the Bank of Canada, we cover the cost of day-to-day business with “seigniorage,” which means earning money from issuing bank notes. […]
• Understanding quantitative easing
  QE is a tool that encourages spending and investment—helping us to achieve our inflation target by stabilizing the economy. […]
• Understanding our policy interest rate
  At the heart of the Bank of Canada’s monetary policy is the target for the overnight rate. See what it is—and what it means for you. […]
• Understanding the output gap
  The output gap is the difference between what an economy actually produces and what it would produce in an ideal world. […]
• Understanding productivity
  High productivity helps raise our standard of living and keep our economy competitive. […]
• Understanding the consumer price index
  The consumer price index (CPI) tracks how much the average Canadian household spends, and how that changes over time. At the Bank of Canada, we use it to target inflation. […]
• Understanding how monetary policy works
  It takes time for our policy decisions to filter—or be transmitted—through the economy and financial system. […]
• Understanding inflation targeting
  At the Bank of Canada, we aim to keep inflation close to 2 percent. […]
• Understanding inflation
  Inflation is a persistent rise in the average level of prices over time. […]
• Understanding exchange rates
  The foreign exchange market determines how much the Canadian dollar is worth. At the Bank of Canada, we very rarely intervene to support its value. […]

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