Canadian dollar currency characteristics
Canadian residents are mainly descendants of British and French immigrants, English-speaking and French-speaking areas, so both English and French are used on banknotes. Canada is a Commonwealth country, and the banknotes are mainly based on the heads of the British rulers.
The main characteristics of its cash can be briefly summarized as follows:
Currency name: Canadian dollar (CANADA DOLLAR)
Currency symbol: CAD
Currency carry: 1 yuan = 100 cents (CENTS)
Banknote denominations: 2, 5, 10, 20, 50, 100, 1000 yuan
Issuer: Bank of Canada (BANK OF CANADA)
Factors affecting the Canadian dollar
For short, the Canadian dollar, or Canadian dollar ("Loonie" in English, the loon is a water bird, and the Canadian dollar coin has a loon pattern).
The unique position of the Canadian dollar is that the bilateral trade volume between Canada and the United States is higher than the bilateral trade volume between any other two countries. 80% of Canadian exports go to the United States, so the Canadian dollar exchange rate is closely related to the strength of the US economy.
The Canadian dollar is also considered a "commodity currency" because approximately half of Canada's exports come from merchandise exports. However, most of these commodities are non-energy commodities, so the Canadian dollar exchange rate is more affected by the price changes of non-energy things. The increase in oil prices will put pressure on the Canadian dollar because it will weaken the purchasing power of the Canadian dollar.
Bank of Canada: The Central Bank of Canada. The main goals of the Bank of Canada are "low and stable inflation" and "safe and reliable exchange rates." The Bank of Canada's inflation target (annual growth rate) is 2.0%, the midpoint of the 1.0-3.0% inflation target range. Although the inflation level is calculated by the Consumer Price Index (CPI), the Bank of Canada uses the core consumer price index (excluding food and energy prices) as a reference in actual operations to evaluate potential inflation trends and better evaluate consumption Changes in the consumer price index in the future. The inflation target range is updated every five years, and the current 1.0-3.0% target range will be updated in 2006.
The Board of Directors of the Bank of Canada consists of the President, Deputy Governors, and 12 other directors. In addition, the Deputy Minister of Finance also attends board meetings but does not have the right to vote. The president and vice presidents are appointed by the directors for seven years and can be re-elected. The chancellor appoints the directors. Suppose the Chancellor of the Exchequer and the Bank of Canada disagree on monetary policy. In that case, the Chancellor of the Exchequer may, after consulting with the governor, submit a written notice to the governor that the governor must implement it.
It was not until November 2000 that the Bank of Canada began to introduce a new system of monetary policy meetings, that is, to determine in advance the date of the monetary policy meeting eight times a year and announce the content of the monetary policy on the day of the meeting. Previously, the Bank of Canada could adjust interest rates on any business day. The results of interest rate decisions are usually announced at 9 am (local time) on a Tuesday or Wednesday.
The key interest rate in Canada is the overnight interest rate or cash rate, which is the benchmark for the interest rate of inter-bank borrowing funds. The "Bank of Canada interest rate," which is 50 basis points higher than the overnight interest rate range, is the interest rate Canadian banking institutions pay to Canadian banks when using the "large-value funds transfer system" to hold overnight funds.
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