The Government has an account with currencies from around the world.

– US dollars, Euros,

British Pounds, and Japanese Yen.

This acts like an insurance fund for Canada in case of a major crisis

or a disruption in the financial markets

that causes an extreme movement of the Canadian dollar.

You see, the value of the Canadian dollar changes every day compared

with other currencies in the world,

but we don’t want it to plunge rapidly

or soar out of control!

If this ever happened, the Government could tell the Bank

to use the foreign currencies in this Exchange Fund Account

to buy or sell Canadian dollars

– this would help keep the dollar from rising or falling too far, too fast.

In 2016, there was about $100 billion in the Exchange Fund Account

at the Bank of Canada.