The Markets area of the Bank is responsible for managing the Bank's balance sheet. This includes implementing the monetary policy decisions of the Monetary Policy Committee through its operations in the sterling markets and supplying liquidity insurance to the banking system.
The Bank deals in the foreign exchange market as part of its day-to-day management of the "Exchange Equalisation Account" - which holds the UK's foreign currency and gold reserves. These reserves are owned by HM Government for whom the Bank acts as Agent. The Bank also operates in the foreign exchange market on its own behalf, and on behalf of customers.